BoI gloomy about economic prospects for 2009

Bank of Ireland has issued a gloomy assessment of Ireland's economic prospects for next year.

In its latest quarterly outlook, the bank says it expects zero growth this year and a GDP increase of just 1.5% next year, despite more optimistic forecasts by other commentators.

BoI chief economist Dan McLoughlin says the increase in government spending must be confined to no more than 4% next year, compared to 10% over the past few years.

He says the "extraordinary" slowdown this year will main affect ordinary people via a rise in unemployment and the creation of significantly fewer new jobs.