CBI cuts growth forecast to reflect weaker economic conditions
- The CBI is forecasting GDP growth in 2012 to be -0.3%, below its previous forecast in May of +0.6%.
- Growth should return to the UK economy towards the end of the year, and pick up a little pace during 2013
- In the third quarter of 2012, quarter-on-quarter growth is expected to be +0.6%, followed by +0.2% in the final three months
- In 2013, the CBI forecasts GDP growth of +1.2%, revised down from its previous forecast of +2%
- Inflation is expected to fall back a little further by the end of the year, and should remain close to the Bank of England’s 2% target throughout 2013
- The CBI does not expect unemployment to increase by as much as previously thought, peaking at 2.7m in mid-2013
- Growth in business investment is expected to remain modest, at around 5% this year and 3.8% in 2013
- Export growth is likely to be weaker than was forecast in May. The CBI expects a small contraction this year (-0.4%), followed by an increase next year (3.5%), with demand from faster-growing, emerging markets likely to provide some support
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