CBI:
Despite recent signs that the economy may be stabilising, the Confederation of British Industry (CBI) has predicted that positive growth may not occur until next year.
In its latest forecast, the business group predicts that the economy will contract by 3.9% over 2009 before positive growth resumes in early 2010.
While acknowledging that the harshest period of the recession has passed, CBI Director General, Richard Lambert, said the ‘return to growth is likely to be a slow and gradual one’.
He also warned against getting ‘carried away’ by recent evidence of ‘green shoots’ in the economy. ‘It will take some time before we can be sure these shoots have roots we can depend on for sustainable growth and, in the meantime, the Government must do everything it can to help firms get access to credit.’
The CBI expects the economy to expand by 0.1% in the first three months of 2010 and by 0.3% in the second quarter. This profile yields an average annual GDP growth of a modest 0.7%, the group said.
However, the National Institute of Economic and Social Research estimates that the next set of official GDP figures will show ‘either that the recession is over or that it is close to over’.