The UK faces the toughest economic situation since the dotcom bubble burst in 2001, according to a new poll of senior economists by the Financial Times (FT).
The survey of 55 leading economists shows confidence in the economy is lower than last year and financial authorities now have less power to stop the full effects of the credit crunch market troubles than when stock markets fell off the back of the dotcom bubble bursting in 2001/02.
The poll also revealed inflation will remain a pressure on the economy and households in the coming year - meaning the Bank of England may not be able to cut interest rates to aid the economy.
Property prices will also face pressures, according to the FT poll, with two-thirds of the economists forecasting house price falls.
Merryn Somerset-Webb, editor of MoneyWeek, told BBC One's Breakfast programme this morning a "difficult year" was ahead with the feel-good factor stemming from rising house prices and easy credit dissipating.
"A lot of the feel-good-factor from last year was connected to rising house prices and connected to easy credit," she said.
"We don't have either of those things anymore; house prices are falling, credit has got harder and more expensive to get.
"So the two things that made us feel like our finances were under control are gone."
Meanwhile Howard Archer, chief UK economist at analysts Global Insight, predicts a "considerably bleaker" outlook for 2008 than in 2007.
GDP growth is forecast to fall to 1.8 per cent in 2008, down markedly from estimated expansion of 3.1 per cent in 2007, and house prices are expected to fall three per cent.
He said: "We believe the economy will slow in the face of a number of persistent major headwinds which will hit consumer spending, business investment and exports.
"Meanwhile, government spending and investment is starting to become less supportive to growth."