The UK may already be in recession, but it will not be as prolonged as that 1990s downturn, the Confederation of British Industry (CBI) said today.
In its latest assessment of the UK economy, the CBI downgraded its growth forecasts for 2008 from 1.7 to 1.1 per cent, with economic output expected to shrink by 0.2 per cent and 0.1 per cent over the remaining two quarters.
GDP growth forecast for 2009 was cut even more drastically, from 1.3 to 0.3 per cent.
Nevertheless the Confederation said GDP should stabilise in 2009 ahead of a gradual and growing recovery.
“The UK may have entered a mild recession that will hopefully prove short lived. This is not a return to the 1990s when job cuts and a slump in demand were far more prolonged,” CBI director-general Richard Lambert said.
Although the credit crunch would “be with us for some time” Mr Lambert said “conditions are set to improve later in 2009”.
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