Alistair Darling says Britain is facing its worst economic crisis since the 1940s. The chancellor is warning the current downturn will hit harder and last longer than we expect. It's the government's grimmest assessment to date of the situation facing the British economy. Mr. Darling says conditions here and abroad are now arguably the worst they’ve been for 60 years.

In an interview with the Guardian newspaper, he also admitted ministers had failed to explain the problem to voters, and that they were understandably angry with Labors’ handling of the situation. His comments are likely to prove controversial. They are much more negative than those expressed publicly by Gordon Brown.

However, Mr. Darling's remarks come after somewhat bad economic news.

House prices are falling at their fastest rate in 18 years, leading to fears of a wave of repossessions in the upcoming months.'

Mortgage lending has slowed dramatically due to the credit crunch. And evidence suggests that Britain could be poised to go into a recession in the near future. The most recent GDP figures show no economic growth in the second quarter of the year, while building firms and retailers have laid off thousands of staff in recent weeks. Amid fears, things will deteriorate even further.