Economic slowdown warning from CBI

News Article - Tuesday, March 25, 2008

filed under: Business

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The UK's businesses are warning that economic growth in Britain could slow down at a much higher rate than expected, as soaring household costs affect spending.

As consumers tighten their belts, firms are being urged to ensure they are in the best possible business health and enhance business performance.

In its latest quarterly report, the Confederation of British Industry (CBI) predicts that the outlook for the UK economy is a gloomy growth rate of just 1.8 per cent in 2008 and 1.7 per cent in 2009.

According to the CBI, economic growth will underperform current forecasts for the next two years and will fall to its weakest rate since 1992, affected by rising energy and food prices.

Reducing its forecast for 2008 from two per cent, the organisation also predicted that the Bank of England will cut interest rates three times over the next year, to 4.5 per cent in 2009.

Richard Lambert, CBI director general, said: "Having enjoyed two years of strong growth, we are now living in uncertain times. We are facing a financial shock on a scale not experienced in recent times, which is coming on top of already slower growth."

In periods of economic uncertainty, effective business and accounting software can play a vital role in streamlining processes, enhancing flexibility and improving business growth.

The credit crunch is continuing to affect British businesses, as consumer spending slows significantly and inflation rates rise, with economists predicting a difficult couple of years ahead.

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