Recovery to slow but not stop, says CBI

The pace of economic recovery could slow ‘markedly’ in the first quarter of 2011, warns Richard Lambert, CBI director general.


The pace of economic recovery could slow ‘markedly’ in the first quarter of 2011, warns Richard Lambert, CBI director general.

The pace of economic recovery could slow ‘markedly’ in the first quarter of 2011, warns Richard Lambert, CBI director general.

He predicts that the quarterly growth rate in the next three months could decline to 0.2 per cent, compared with 0.7 per cent in the third quarter of 2010.

Lambert explains that the VAT increase and the impact of public sector spending cuts in the construction sector will slow economic recovery.

However, he says that CBI’s forecasts suggest growth in private sector investment and trade will begin to pick up in the second half of the year, continuing into 2012, in line with the consensus view.

This would result in GDP growth of 2 per cent in 2011 and 2.4 per cent the following year.

‘This means that the CBI is not expecting a double-dip recession, or a dramatic surge in inflation and interest rates,’ says Lambert.

Related Topics

CBI
Economic Recovery

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