The CBI has called for the government to take seven actions this summer to prevent a full-blown recession.
The UK’s biggest business group forecasts stagnant growth as consumer confidence decreases and inflation continues to sky-rocket. It has reduced its GDP growth outlook for 2022 to 3.7 per cent – down from 5.1 per cent. The growth outlook for 2023 has dropped to 1 per cent, down from 3 per cent previously.
The CBI’s director-general Tony Danker has lambasted the focus of the government, warning that if attention isn’t directed on the economy instead of debates on ideology and leadership, the UK could enter a “very live” recession.
He told the Sunday Times that the prime minister and the cabinet need to grip the economy “like they did Covid” and should be co-chairing Cobra-style emergency planning meetings.
The seven actions the CBI is calling for before the autumn budget are:
- A full commitment to a permanent successor the super-deduction
- Cut approval times for new offshore wind farms from four years to one year
- Call for immediate talks to resolve the Northern Ireland Protocol impasse and finalise Brexit
- Act as a broker between rail companies and unions to avoid summer strikes
- Announce a permanent replacement to the recovery loan scheme to support cashflow
- “Get real” on industry concerns over labour shortages
- Add immediate flexibility to the apprenticeship levy for one year, allowing all employers to use their levy funds to tackle labour shortages
Danker said: “Let me be clear – we’re expecting the economy to be pretty much stagnant. It won’t take much to tip us into a recession. And even if we don’t, it will feel like one for too many people.
“It’s as clear as day that business investment is one of the few bright spots left in our economy. The super deduction is one of the only reasons we have staved off the threat of recession for now – there must be a permanent successor.
“There is only a small window until recess. Inaction this summer would set in stone a stagnant economy in 2023, with recession a very live concern.
“We need to act now to install confidence. This can wait no longer.”