After the party comes the year 2000 bust

THE BRITISH economy will get a pounds 1.7bn boost from extra pre-millennial spending, according to a report published today. But the 1999 boost will be followed by a year 2000 bust, according to another influential economist.

Spending on millennium construction projects, fixing the year 2000 computer bug, New Year celebrations and stockpiling in case of emergencies by households and businesses ahead of 1 January 2000 will all help to stimulate growth this year, the new report from the Centre for Economics and Business Research (CEBR) calculates.

These will more than offset the negative impact on growth of a possible dip in confidence and a credit crunch if banks hold back on making new loans because of the year 2000 problem.

But separately, a leading US economist is warning of the high risk of a serious global recession in the year 2000, largely because of glitches caused by the fact that many computers and embedded microchips could go wrong on 1 January.

Edward Yardeni of Deutsche Bank in New York is predicting a 70 per cent chance of a global recession next year as a result - probably a "serious" recession. "The global financial crisis of 1997-98 may turn out to be a warm-up act for the year 2000 main event," he said.

The US economy too is being boosted in advance by extra spending on information technology to try to sort out the problem.

Mr Yardeni calculates that companies in the S&P 500 index have allocated $10.1bn to year 2000 spending. Among the biggest budgets are those of telecoms companies such as AT&T (at $711m), giant corporations including GM ($586m) and investment banks such as Merrill Lynch ($200m).

For the UK, the CEBR report estimates the net effect of the millennium at a relatively modest 0.2 per cent boost to GDP growth in 1999, or an additional pounds 1.7bn in spending. Even so, this could be enough to safeguard the economy from outright recession.

Greater than usual spending on construction, funded by Lottery grants for capital projects, and parties will be one of the biggest effects. So will the IT spending on top of normal budgets.

News
peopleFrankie Boyle responds to referendum result in characteristically offensive style
Arts and Entertainment
Friends is celebrating its 20th anniversary this year
tvSeries celebrates 20th anniversary
News
news
Life and Style
Jack Cooksey goes for the grand unveiling - moments before dropping his new iPhone 6 on the floor
iphone launch
PROMOTED VIDEO
Life and Style
Life and Style
Customers look at the new iPhones on display at the launch of the new Apple iPhone 6 and iphone 6 plus at the Apple IFC store in Hong Kong
Arts and Entertainment
Matthew Beard, Ben Schnetzer, Douglas Booth and Jack Farthing in ‘The Riot Club’
propertyfilmReview: It's the sheer nastiness of the Riot Club that takes you aback, says Geoffrey Macnab

Sport
Twelve of the winning bidders will each host three group matches
football
News
news
Arts and Entertainment
Liam Neeson said he wouldn't
tv

Liam Neeson's Downton dreams

Sport
Yaya Touré (left) and Bayern Munich’s Spanish defender Juan Bernat
football
Arts and Entertainment
A spell in the sun: Emma Stone and Colin Firth star in ‘Magic in the Moonlight’
filmReview: Magic In The Moonlight
Voices
voicesApple continually kill off smaller app developers, and that's no good for anyone
News
ebooksAn unforgettable anthology of contemporary reportage
Sport
A 'Sir Alex Feguson' tattoo
football

Arts and Entertainment
Ben Whishaw is replacing Colin Firth as the voice of Paddington Bear
tv

Thriller is set in the secret world of British espionage

Life and Style
life

News
ScienceGallery: Otherwise known as 'the best damn photos of space you'll see till 2015'
Life and Style
fashion

Bomber jacket worn by Mary Berry sells out within an hour

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Head of Audit

To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

Audit Manager Central Functions

To £85,000 + banking benefits: Saxton Leigh: You will be expected to carry out...

Credit Risk Audit Manager

Up to £90,000 + benefits: Saxton Leigh: Credit Risk Audit Manager required to ...

Day In a Page

Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week