Umbrella company contractors may be interested to read the CBI’s predictions for the UK economy.
The leading business group predicts that the rate of growth will be sluggish for the rest of this year and GDP will show a modest improvement next year.
Despite the fact that business confidence continues to decline and pressures continue on consumer spending, the CBI expects to see the economy expanding by 1.3% this year. In 2012, it predicts growth of 2.2%. Export growth is expected to pick up but subdued domestic demand will have an impact on imports.
The CBI also predicts modest investment growth of just 3.7% this year, but expects this to improve dramatically to 9.3% in 2012.
John Cridland, the director-general of the CBI, said the UK’s economic outlook had become even more challenging but we can expect to see modest growth for the remainder of this year and into next. The global economy has been hit by various shocks including soaring commodity prices and the Japanese tsunami. There are also uncertainties about the Eurozone debt crisis and the US debt ceiling which erode confidence.
Mr Cridland went on to point out that although we may see a lacklustre economic recovery, the UK will remain on track. The latest GDP figures showed quarter-on-quarter growth of just 0.2% but the third quarter should see 0.8% growth and the economy will continue to grow at between 0.5% and 0.6% until the end of next year.
The chief economic adviser at the CBI, Ian Mc Cafferty, explained that we will see very tough economic conditions for the remainder of 2011 but things will brighten up next year as inflation eases and salaries improve.
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Image: Tracks by Uwe Hermann
