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CBI Lowers UK Growth Forecast

Growth in the U.K. in 2011 is now expected to be slightly lower than had been previously thought as austerity measures weigh on the private sector and consumer sentiment, according to Financial Times.

Growth in the U.K. in 2011 is now expected to be slightly lower than had been previously thought as austerity measures weigh on the private sector and consumer sentiment, according to Financial Times. On Wednesday, the CBI said that it expects gross domestic product in the U.K. to expand by 1.8% in 2011, which is down from the 2% forecast the group offered in December. The group added that despite the weaker outlook, the chance of a double-dip recession was still low.

The CBI anticipates that the unemployment rate will increase from 7.9% to 8.4% in 2011, and remain unchanged in 2012 as the private sector struggles to take up slack from public spending cuts, adds The Daily Telegraph. The official forecast from Office for Budget Responsibility is for unemployment to inch up to 8% this year before dropping to 7.7% in 2012. The report summarized that the “economic outlook remains subdued,” but added, “The economy will continue to growth in the coming two years.”

Click here to read the story from Financial Times.

Click here for additional coverage from The Daily Telegraph.

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