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Sluggish recovery predicted by CBI

01 April 2010

Business leaders say they expect the economic recovery in the UK to remain sluggish during 2010, and will not pick up much pace until the middle of next year.

The latest economic forecast from the CBI may appear gloomy reading for some  interim managers as the country's largest employers' group expects just fragile growth in the near-term.

The CBI believes this is because stimulus measures - such as the VAT cut and car scrappage scheme - are ending and consumer spending remains subdued as people save more and worry about job security.

However, interims will welcome the fact that the economy is expected to grow in the first two quarters of 2010, by 0.3% and then 0.4% respectively, and by a slightly faster 0.5% in the next two quarters.

As global demand, consumer spending and business investment strengthen through 2011, the pace of growth should then pick up, though GDP is still not expected to have returned to pre-recession levels by the end of 2011.

Richard Lambert, CBI Director-General, said the economic outlook is improving, but the lack of a clear driver for growth will make for a bumpy ride in the months ahead.

To convince international investors that the spiralling budget deficit will not derail the economy, the Government must set out a credible plan to balance the books by 2015-16, two years earlier than currently planned, whilst avoid damaging tax rises, he added.

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