Nov. 3 (Bloomberg) -- The U.K. economy will shrink for the first time since 1991 next year and debt will surge to more than 60 percent of gross domestic product as Prime Minister Gordon Brown ramps up spending, European Commission forecasts show.

The economy will contract 1 percent after expanding 0.9 percent this year, the European Union's executive arm said in a report published in Brussels today. It will grow 0.4 percent in 2010. Debt will be 50.1 percent of GDP this year, 55.1 percent in 2009 and 60.3 percent in 2010, the commission said.

Brown and Chancellor of the Exchequer Alistair Darling signaled last week they will abandon a decade-old pledge to limit debt to 40 percent of GDP as they try to ease the effects of a likely recession on consumers and companies. Brown must call an election by mid-2010 and polls show his Labour Party trailing the opposition Conservatives.

Inflation, which accelerated to a decade-high of 5.2 percent in September, will cool to 1.9 percent next year, below the Bank of England's target of 2 percent, the EU said.

To contact the reporter on this story: Brian Swint in London at bswint@bloomberg.net.

Last Updated: November 3, 2008 04:50 EST