Britain is in a double-dip recession, warns top economists Professor Peter Spencer, chief economic adviser to Item, the only forecasters to use the Treasury's economic model, said: "Figures for the last quarter of 2011 and the first quarter of this year are likely to show that we are back in recession and we are going to have to wait until this summer before there are signs of improvement." Mr Spencer added that it is unlikely that there will be a prolonged double dip, but said that unemployment will probably rise to nearly three million by early next year. Official figures published on Wednesday are expected to show that unemployment continued to rise in the three months to the end of November, as the private sector failed to provide enough jobs to offset those lost in the public sector. "There's a lot hanging in the balance," Mr Spencer said. Our forecast is based on the assumption that the euro remains intact and that policy-makers are able to contain the eurozone crisis. The longer the uncertainty continues, the more debilitating the impact will be on the UK's economic prospects. Olli Rehn, the European Union's top economic official, yesterday attacked the decision by Standard & Poor's to downgrade so many countries as "inconsistent," claiming that the eurozone was taking "decisive action" to end the debt crisis. "It is now important to finalise as soon as possible the features and practicalities of the European Stability Mechanism [the EU bail-out fund] and ... to advance its entry into force to July," Mr Rehn said. Italy, Spain, Portugal, Cyprus, Malta, Slovakia and Slovenia also had their ratings cut. Germany retains its AAA rating, which will allow the continent's largest economy to borrow more cheaply than its neighbours. Standard and Poor's criticised the eurozone's response to the crisis, arguing that spending cuts alone were not sufficient to fix matters and risked being self-defeating. Meanwhile, expectations are rising this weekend that Greece will be forced to abandon the euro within months, after talks between Athens and private sector lenders stalled. Greece has been ordered to persuade banks and other private-sector creditors to sustain a 50% write-off. The International Monetary Fund and the European Union have said such a deal is essential for the country to receive the next tranche of its bail-out. Ed Balls, the shadow chancellor, said yesterday that Labour will back plans to extend the public sector pay freeze for the rest of this parliament in order to slash the deficit in Britain's public finances. Mr Balls said: "I understand the anger in the public and private sectors at that income squeeze - but the reality is, given the economy failing as it is, that pay restraint is going to have to continue. And if people expect Labour to say 'We'll just oppose,' we can't do that. [It] would be irresponsible because the priority has got to be getting people into jobs rather than people being paid more. The tough new stance on the pay of state workers follows criticism that the opposition have become "deficit deniers," failing to understand the bleak state of the public finances. Mark Serwotka, the leader of the PCS, the largest civil service union, said that Mr Balls's stance was "hugely disappointing" and accused the Labour Party of "emulating the Tories." "Instead of matching them on the cuts they should be articulating a clear alternative and speaking up for public sector workers and ordinary people in society," said Mr Serwotka. Nick Clegg, the Deputy Prime Minister, will tomorrow announce plans to force public companies to report their executives' pay more transparently than ever before.