Finance chief braces UK for severe plunge in growth

British finance minister George Osborne conceded yesterday that official figures would this week confirm a slowdown in the economy. He was speaking ahead of his keynote autumn statement to parliament tomorrow, in which he will set out his economic plans following the latest data from the independent Office for Budget Responsibility (OBR). The OBR predicted in March that gross domestic product (GDP) would grow by 1.7 per cent in 2011, but this is expected to be sharply downgraded tomorrow. The Bank of England estimated a figure of one per cent earlier this month. Osborne said the debt crisis engulfing the Eurozone was having a "huge, chilling effect" on the British economy, adding: "It's a very, very difficult and dangerous situation." The slowdown in the economy is likely to spell bad news for the government's plan to eliminate the deficit in five years, although Osborne said: "I am confident we are going to meet the targets we set out." Article continues below He is expected to promise no let-up in his austerity drive in Tuesday's statement, which comes the day before unions stage a mass strike over pension reforms in a major challenge to the government. Unions say they expect up to two million people to go on strike on Wednesday against plans to raise the retirement age by up to six years to 66 and to ask public sector employees to pay up to 50 per cent more in contributions. The strike threatens to paralyse Heathrow, Europe's busiest airport. BAA, the airport's operator, said on Friday 12-hour delays for arriving passengers are likely because Wednesday's strike will hit the UK Border Agency's ability to support normal operations. The strike is billed as potentially the biggest union action since the ‘winter of discontent' in 1979. Ministers insist that Britain has no option but to reform its pension system because people are living for longer, and because the gap between contributions and pension payments is growing. In the latest dispute, workers oppose government demands that they work longer before receiving a pension, contribute more money each month and accept a pension calculated using their average career salary, rather than their final salary. Cabinet Office Minister Francis Maude was quoted as saying on Saturday that the strike — which the government claims could cost Britain's economy as much as £500 million — would be "stupid and wrong." He claimed the fact that some of the labour unions involved have the support of less than 50 per cent of their members undermines the case for the walkouts. "If very disruptive strike action is carried out on the basis of these weak ballots, weak turn-outs, the case for reform gets stronger," Maude said, threatening to tighten laws covering strikes. Britain's government says thousands of operations and medical appointments have already been cancelled in anticipation of the strike, with about 400,000 nurses, paramedics, physiotherapists and support staff expected to join the action — though the country's three main medical unions are not taking part. Gridlock The lines at Heathrow's immigration counters are expected to be so long that passengers will need to be held on planes, BAA warned. "This in turn would quickly create gridlock at the airport, with no available aircraft parking stands, mass cancellations of departing aircraft and diversions outside the UK for arriving aircraft," Normand Boivin, the chief operating officer for Heathrow, warned in a letter to airlines. The Home Office said it has undertaken "significant work" to plan for the strike, which includes training managers, staff and contractors to carry out border checks.