Your browser is no longer supported. For the best experience of this website, please upgrade to a newer version or another browser.

Your browser appears to have cookies disabled. For the best experience of this website, please enable cookies in your browser

We'll assume we have your consent to use cookies, for example so you won't need to log in each time you visit our site.
Learn more

UK to emerge from recession in third quarter, CBI says

The UK economy is expected to emerge from recession through modest growth in the third and fourth quarters of this year, according the CBI.

The CBI said a recovery is underway in the global economy, boosted by substantial fiscal stimulus, plus production is starting to lift. However, it said the pace of recovery in 2010 is expected to slow.

The CBI predicted that UK GDP will post quarter-on-quarter growth of 0.3% in the third quarter of 2009, edging up to 0.4% in the fourth quarter as consumers bring spending forward in advance of the VAT increase in January.

However, it said spend will dampen in early 2010 and as a result, next year will start with weak growth of only 0.1% in the first quarter and 0.3% in the second quarter.

Richard Lambert, CBI director-general, said: “The outlook is improving as the UK draws strength from quantitative easing, a weak pound and a recovering global economy. Although growth this quarter should mark the end of the recession, conditions in the UK will remain tough for some time yet, and it is difficult to see where demand growth will come from. 

“Firms that have run down their stocks will now be starting to raise output to meet demand, and consumers are likely to bring forward spending before VAT rises. But once these two boosts are out of the way there is no clear driver of robust economic growth into 2010.”

After five consecutive quarters of contraction, UK GDP has fallen by a cumulative 5.5%, which is close in magnitude to the cumulative 5.9% seen in the early 1980s. The CBI forecasts that GDP will shrink by 4.3% in 2009 and grow by 0.9% in 2010.

Have your say

You must sign in to make a comment

Please remember that the submission of any material is governed by our Terms and Conditions and by submitting material you confirm your agreement to these Terms and Conditions. Links may be included in your comments but HTML is not permitted.