CBI growth forecasts cut
Sep 15 2008
Growth in 2009 will be at its slowest level since 1992, the Confederation of British Industry (CBI) predicts.
According to the industry body, a 'shallow recession' will occur during the second half of 2008 as a result of weak consumer demand, high commodity and energy prices and the effects of the reduced availability of credit.
The CBI predicts a peak in inflation at 4.8 per cent this quarter, after which it should begin to fall along with an easing in commodity prices in 2009, moving back to 2.3 per cent by the final quarter of the year.
Moreover, unemployment will top two million in 2009, with an estimated 6.5 per cent of Britons out of work.
Richard Lambert, director-general of the CBI, says growth next year will be 'feeble at best'.
Despite these problems, 'this is not a return to the 1990s, when job cuts and a slump in demand were far more prolonged', he comments.
Recovery will be aided by falls in commodity prices and a more competitive pound helping the exports sector, the body reports.
Last week, the European Commission warned that the UK is already in recession and its economy will contract in the second two quarters of 2008.
According to the industry body, a 'shallow recession' will occur during the second half of 2008 as a result of weak consumer demand, high commodity and energy prices and the effects of the reduced availability of credit.
The CBI predicts a peak in inflation at 4.8 per cent this quarter, after which it should begin to fall along with an easing in commodity prices in 2009, moving back to 2.3 per cent by the final quarter of the year.
Moreover, unemployment will top two million in 2009, with an estimated 6.5 per cent of Britons out of work.
Richard Lambert, director-general of the CBI, says growth next year will be 'feeble at best'.
Despite these problems, 'this is not a return to the 1990s, when job cuts and a slump in demand were far more prolonged', he comments.
Recovery will be aided by falls in commodity prices and a more competitive pound helping the exports sector, the body reports.
Last week, the European Commission warned that the UK is already in recession and its economy will contract in the second two quarters of 2008.
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