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26/11/2001
CBI predicts rough ride before UK recovers
The CBI has predicted a painful year ahead for British businesses even if the UK manages to avoid a fully-fledged recession.
Revealing their projections for the forthcoming year, the CBI forecasts a decreased rate of economic growth, taking into account the slowdown in the global economy and low levels of consumer confidence.
The report goes on to outline that while inflation is likely to remain relatively stable, staying below the 2.5 per cent target rate, household consumption is likely to tail off, slowing from its present level of 3.9 per cent down to under 2 per cent in 2002.
Ian McCafferty, CBI Chief Economic Adviser, commented: “The real pressure will be on businesses that are exposed to the international environment, which will exacerbate the two-speed economy.
“However, the UK is still the fastest growing of the G7 countries and is well placed to weather the storm. We should see the economy start to rally towards 2003, but the strength of this relies heavily on the timing and momentum of the recoveries in the US and Europe.”
Unemployment is also expected to continue to rise, as companies shed jobs as part of their attempts to consolidate operations in an uncertain climate.
The CBI has fixed an estimate of 1.62 million unemployed by the end of 2002, with slowing investment growth - especially in the manufacturing sector – likely to lead to a lifeless jobs market. (CL)
Revealing their projections for the forthcoming year, the CBI forecasts a decreased rate of economic growth, taking into account the slowdown in the global economy and low levels of consumer confidence.
The report goes on to outline that while inflation is likely to remain relatively stable, staying below the 2.5 per cent target rate, household consumption is likely to tail off, slowing from its present level of 3.9 per cent down to under 2 per cent in 2002.
Ian McCafferty, CBI Chief Economic Adviser, commented: “The real pressure will be on businesses that are exposed to the international environment, which will exacerbate the two-speed economy.
“However, the UK is still the fastest growing of the G7 countries and is well placed to weather the storm. We should see the economy start to rally towards 2003, but the strength of this relies heavily on the timing and momentum of the recoveries in the US and Europe.”
Unemployment is also expected to continue to rise, as companies shed jobs as part of their attempts to consolidate operations in an uncertain climate.
The CBI has fixed an estimate of 1.62 million unemployed by the end of 2002, with slowing investment growth - especially in the manufacturing sector – likely to lead to a lifeless jobs market. (CL)
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CBI chief 'cautious' over UK economy growth
In an address to top business people in Belfast, CBI chief economist, Ian McCafferty said businesses pinning their hopes on a rapid recovery in the UK economy are likely to be disappointed over the coming months.
CBI chief 'cautious' over UK economy growth
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