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CBI predicts 2009 recovery

Jun 17 2008

The Confederation of British Industry (CBI) is forecasting that the manufacturing sector will lead to the recovery of the British economy at the end of 2009.

Speaking to Channel 4's News at Noon, John Cridland, deputy director general of the CBI, explained that a rise in oil prices was one of the significant reasons for reduced growth predictions.

Yesterday the CBI announced it had lowered growth forecasts for the British economy over the next year by 0.4 per cent from 1.7 per cent to 1.3 per cent.

Higher oil prices were causing problems for both investment in business and confidence among consumers.

A rise in unemployment has also been predicted because of high numbers of individuals and businesses suffering as a result of reduced consumer spending, Mr Cridland explained.

One example of this, he told Channel 4, was a fall in the number of white goods sold as a result of the reduced numbers of people moving house.

'But let's keep this in perspective: a hundred to 150,000 extra unemployed is clearly a worry, it's regrettable, but it's not the sort of fall-off in unemployment we saw in the late 80s, early 90s,' he told News at Noon.

Mr Cridland said that the weaker pound would help the manufacturing industry to expand, leading to economic recovery at the end of 2009.

Inflation has reached 3.3 per cent, it has been announced, meaning that governor of the Bank of England Mervyn King has had to write a letter to the chancellor explaining why the figure is so far from the government's target of two per cent.

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