A dire warning about the depth of the economic crisis was sounded by the CBI this morning.
The business group predicted a gloomy 12 months ahead with unemployment getting close to 3 million and recovery not beginning until the last quarter of 2009.
The CBI downgraded its official forecast for next year’s economy from the 0.3% growth it predicted as recently as September to a massive 1.7% contraction.
John Cridland, CBI deputy director-general, said: “Given the speed and force at which the downturn has hit the economy, we have reassessed and downgraded our expectations for UK economic growth.
“What is clear is that the short and shallow recession we had hoped for a matter of months ago is now likely to be deeper and longer lasting. An unwelcome consequence of the downturn will be a significant loss of jobs, many of them in sectors that have been relatively insulated until now.”
Unemployment will reach 2 million by the end of 2008, and about 2.9 million by next summer, according to the CBI. That would see almost one in 10 of those who are willing and able to work unable to find a job.