Monday, the Confederation of British Industry said in a report that the UK recession deepened more than expected in the first quarter of this year, but it is forecast to moderate in the second half of the year.
The CBI revised its GDP forecast for 2009 saying the economy will contract 3.9% compared to an earlier estimate of 3.3% fall, reflecting a harsher sequential decline of 1.8% in the first quarter of 2009.
Further, the lobby sees slow and fragile recovery, with GDP growth resuming only in the spring of 2010. The CBI predicts a 0.2% sequential growth in the second quarter of 2010 which would be aided aggressive monetary policy, a weaker pound, low inflation and the fiscal support measures announced by many nations.
Richard Lambert, CBI Director-General said, Given falling tax revenues, the shrinking economy, and alarming levels of government debt, we urge the Chancellor to avoid any further major fiscal boosts in the Budget. Budget measures should be targeted on jobs and investment, with a focus on efficiency savings and public service reform.
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