Member Article

Growth still expected, but it will be slow -CBI

The CBI is continuing to forecast that the UK economy will grow in 2011, but at a slow pace.

The impact of December’s bad weather means the UK’s leading business group now expects this year’s GDP growth rate to be 1.8%, down slightly from an already sluggish 2.0%.

Its forecast for 2012 is for slightly faster growth of 2.3%, down from a forecast of 2.4% in December.

Although a number of risks to the outlook remain, the UK economy is still on the road to recovery, and the CBI maintains its view that the risk of a double dip into recession is low.

John Cridland, CBI Director-General, said: “The early estimate for GDP growth in the final quarter of last year came as a surprise to everyone, suggesting that underlying growth may have been weaker than previously thought.

“We must wait and see just how weak it was, and how much was down to December’s bad weather, but we do expect growth in 2011, albeit rather anaemic and sluggish, which will accelerate during 2012.”

Despite the New Year rise in VAT, a bounce back after the bad weather of December is expected to help quarter-on-quarter growth edge up to 0.6% in Q1 2011.

This was posted in Bdaily's Members' News section by Ruth Mitchell .