UK’s CBI forecasts slow and sluggish economic recovery
22 Mar 2010
The UK's economic recovery from the recession is expected to remain sluggish in 2010, as certain stimulus measures such as the temporary sales tax cut and the car scrappage schemes are due to end in the first quarter, the Confederation of British Industry (CBI), the country's top business lobbying organisation said.
The employer's group, representing some 240,000 businesses that together employ around a third of the private sector workforce in the UK, expects the pace of economic growth to pick up by the middle of next year based on increased global demand, consumer spending and business investments.
"The economic outlook is improving, but the lack of a clear driver for growth will make for a bumpy ride in the months ahead,'' Richard Lambert, CBI director general, said in a statement.
''The CBI expects the recovery in 2010 to be slow and sluggish, with few signs of real strength until well into next year,'' Lambert further said.
The UK's gross domestic product (GDP) grew by 0.3 per cent in the fourth quarter of 2009, marking the country's exit from the global economic downturn which lasted 6 quarters, from the second quarter of 2008 to the third quarter of 2009.
Lambert said that the government must set out a credible plan to balance the books by 2015-16, two years earlier than currently planned, to convince international investors that the spiralling budget deficit, which is over 12 per cent of GDP now, will not derail the economy.
On a quarterly basis, the business group predicts an economic growth of 0.3 per cent in the first quarter and 0.4 per cent in the second quarter of 2010 which is expected to rise marginally to 0.5 per cent in the last two quarters.
Overall, the CBI forecasts an annual GDP growth of 1-per cent in 2010, followed by 2.5 per cent in 2011.
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