The latest report from the Center for Economics & Business Research forecasts that the U.K. recovery will slow into next year, increasing the risk that the economy will slip back into a recession, according to The Daily Telegraph. On Friday, the CEBR estimated that growth in 2011 would slip down to 1.1%, which is well below the 2.1% forecast published by the government. The group also said that slowing growth increases the chance of a double-dip recession to one-in-five from the slim one-in-ten outlook seen just three months earlier.
The National Institute for Economic and Social Research also added a bleak outlook, forecasting that economic growth would not return to pre-recession levels until 2012. A separate from the Office for National Statistics showed input prices at British factories surged 3.4% in December, boosting the annual gain to 12.5%, marking is the highest since April. Output prices rose as well, while the latest consumer price inflation was recorded at 3.3%, which is a level well above the 2% official target. Both the NIESR and the CEBR recommend that the Bank of England leave interest rates at record lows despite the high inflation, in order to help strengthen the uneven economic recovery.
Click here to read the story on economic growth from The Daily Telegraph.
Click here for coverage of producer prices, also from The Daily Telegraph.