CBI believes UK will avoid double dip recession
The CBI (Confederation of British Industry) has today come out in support of the UK economy suggesting that the UK is likely to avoid a double dip recession and indeed the CBI increased its economic growth forecast for 2010 from 1.3% to 1.6%. However, some people will be alarmed to see the CBI reduce its forecast economic growth for 2011 from 2.5% to just 2%. So in a best case scenario it seems as though the UK economy is set for a difficult 2011.
It looks as though the increase in forecast economic growth in 2010 is simply as a result of companies rebuilding their stocks and the expected reduction in 2011 is because of a reduced level of disposable income in UK households. Even the more upbeat forecasts regarding the UK economy seem to be tinged with disappointment with many now predicting that 2011 could be a key period for the UK economy.
This confusion regarding the future economic performance of the UK is unhelpful for business leaders because different reports show different forecasts which make it very difficult to plan ahead with any confidence. In due course the future direction of the UK economy will become clearer but at this moment in time it is difficult to justify any significant business investment against a confusing
economic backdrop.
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