Member Article

CBI reduces UK growth targets

The CBI has cut its growth forecasts, but is still calling on the government to continue implementing austerity measures.

The BBC reports that growth is expected to be just 0.9% in 2011 and 1.2% in 2012. These figures are much lower than original predictions on 1.3% and 2.2%.

Despite this however, the CBI is expecting the UK to avoid recession over the winter months, but encouraged the government to continue its plans to bring down the deficit.

These figures conflict with the governments own growth outlook, which is far more optimistic, prediction 1.7% growth in 2011 and 2.5% in 2012.

The CBI attributed their lower figures to the effects of the euro zone crisis, as the threat of recession on the continent could damage UK exports and business investment.

However, the CBI does believe that inflation will start falling back in the New Year, and will return to the Bank of England’s target rate of 2% by 2013.

They also recommended other measures to get the economy moving, including attracting £20 billion of private sector investment, and measures to boost energy intensive industries.

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