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Slow growth expected this year and next says CBI

The UK economy will continue to make headway in 2011, but growth will be patchy and slow, according to the CBI’s latest economic forecast.

Despite a squeeze on household income, and public spending cuts, the CBI expects this year’s GDP growth rate to be 1.7%, marginally lower than the previous forecast of 1.8%.

Growth of 2.2% is expected in 2012, down slightly from February’s forecast of 2.3%.

John Cridland, CBI director-general, said: “Although there are a number of risks to the UK’s economic outlook, we continue to expect that the recovery will make further headway this year and next, but the pace will be sluggish.

“The economy is battling headwinds of squeezed household budgets, weak wage growth, high inflation, and necessary public spending cuts. Concerns also remain over the volatility of oil prices, and the impact of the earthquake in Japan on UK supply chains.”

The CBI said Stronger net exports are expected to make an important contribution to the UK economy both this year and next.

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