Even though the British economy is thought to have made it out of the recession during the last quarter of 2009, it still will not reach the GDP of pre-recession before the close of 2011, according to a new report by the Confederation of British Industry.
The CBI predicts that even though Q4 of 2009 saw a .5% growth it is likely that in the first half of 2011 there will only be a .3% increase. This will likely be followed by a meagre .5-.7% increase by the end of 2011 making any growth fragile according to the deputy general of CBI, John Cridland.
Cridland added that to think that Britain will be out of the recession before 2011 would just be ‘kidding ourselves.’
The CBI also stated that in 2011 the UK GDP growth will only be about 2.5% following its prediction of 1.2% in 2010.
Cridland also stated that households and businesses will continue to struggle in the next two years and that it will be especially hard during the beginning of 2010 since several stimulus plans such as the scrappage scheme and VAT cut will end. He stated that with these factors in mind the CBI is not as upbeat about the growth rate of the GDP as the Chancellor is.
Alistair Darling stated in his pre-budget report that the GDP may grow as much as 3.5% in 2011 which the CBI counters by stating their main wish of the New Year was to get a better grip on the state of public finances.