Economic growth in the year ahead is expected to continue, but will be slower than originally predicted, according to the Confederation of British Industry (CBI).
The growth forecast for 2011, which was published by the CBI today, revealed that gross domestic product is expected to expand over the year at a rate of 1.85 – a slightly lower figure than the 2% rate forecast in December last year.
While a number of risks to the outlook remain, the UK economy is still on the road to recovery and the likelihood of a double-dip recession is low. However, the CBI forecast for 2012 showed slightly faster growth of 2.3%, down from a forecast of 2.4% in December.
Ian McCafferty, CBI chief economic adviser, said: “The economic outlook remains subdued, and conditions for the consumer will be tough for some time to come. But the economy will grow in the coming two years and, despite the recent shock of the estimate for GDP in Q4 2010, we do not foresee a double-dip recession.
“What remains the case is that growth at this stage is far less robust than we would normally expect for the second and third year of an economic recovery.”
Inflation is expected to remain high this year as the impact of the higher rate of VAT is felt, and also due to pressure from rising energy and commodity prices. However, UK exports should grow by 6.6% this year and 7.8% in 2012. Business investment is also expected to help drive economic growth.
© Crimson Business. Ltd 2011