UK growth predicted to fall to 17-year low

The UK’s largest employers’ group has downgraded next year’s GDP growth forecast by 0.4% to 1.3%, the lowest rate since 1992. Growth for 2008 has been lowered to 1.7%, down 0.1% on March's forecast. Consumer spending is expected to slow significantly, with consumption growth set for 0.7% in 2009, the lowest since the 0.5% recorded in 1992. The CBI says the rising inflation, driven by record oil prices and steep increases in commodity costs, will exceed 3% for the remainder of 2008 – hitting 3.8% in Q3. It predicts Bank of England governor Mervyn King will have to write four explanation ...