CBI reduces growth forecast for UK

News Article - Tuesday, June 17, 2008

filed under: Regulatory

The Confederation of British Industry (CBI) has chosen to revise down its estimates for economic growth in Britain yet again, in light of the continued economic slump.

According to the employers' group, UK economic growth will slide in 2009 to its lowest rate since 1992, as soaring fuel and household costs affect consumer spending.

A report by the CBI states that it now expects economic growth to slow next year to just 1.3 per cent, predicting a "very prolonged period of very sluggish growth" for the country.

The CBI lowered its forecast for gross domestic product growth in Britain for 2009 from 2.1 per cent to 1.7 per cent in March this year, as the credit crunch continued to affect markets.

Predictions for 2008 economic growth have also been revised back from 1.8 per cent forecast by the CBI in March to just 1.7 per cent.

Official forecasts place economic growth in 2009 at 2.5 per cent, but analysts are increasingly questioning whether this is possible in the current climate. Britain was emerging from recession in 1992 when economic growth was around 1.3 per cent.

Figures from the Office for National Statistics reported an increase in annual consumer inflation in May of 0.3 percentage points on the previous month, reaching 3.3 per cent.

Businesses concerned about managing their finances during the current economic slump can invest in accounting software to improve the accuracy of their records.

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