The Confederation of British Industry (CBI) has joined a growing number of voices in saying that the UK is in, or close to, a recession.
The employers’ organisation predicts that growth in 2009 will be “feeble at best” and unemployment will rise to 2 million.
But the director-general of the CBI, Richard Lambert, also said that although the UK is “almost certainly” in the early stages of a recession, it will be “shallow and short”.
“Having experienced a rapid loss of momentum in the economy over the first half of 2008, the UK may have entered a mild recession that will hopefully prove short-lived,” Lambert said.
“This is not a return to the 1990s when job cuts and a slump in demand were far more prolonged. The squeeze on household incomes and company profit margins from higher costs will begin to ease as the price of oil moves downwards and, although the credit crunch will be with us for some time, conditions are set to improve later in 2009,” he said.
The Organisation for Economic Co-operation and Development (OECD) and the European Commission have also said that the British economy will experience a small loss of output.
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