The British economy is expected to shrink by 3.9% in 2009, more than expected only a few months ago.
The Confederation of British Industry (CBI) has revised its forecast for gross domestic product (GDP) in Britain, saying the country’s economy will contract by 3.9% in 2009 compared with the 3.3% fall predicted in February.
A report released today said that weak industrial output and international trade data had led the CBI’s world economic outlook to deteriorate further.
It adds that global GDP is expected to contract this year for the first time since the second world war, but it is encouraged by stimulus measures which should benefit countries later in the year.
Back in Britain, the CBI expects the recession to last through six consecutive quarters, but the peak-to-trough loss of output is now forecast to be less severe then the 1980s recession.
“We continue to anticipate a recovery in the economy over the course of 2010, albeit at a fairly subdued pace. Growth (quarter-on-quarter) is expected to resume early next year,” said the CBI.
British economy shrank in last quarter of 2008