UK growth will slow to its lowest level in 17 years in 2009, as the economy feels the effects of rising commodity costs and weaker consumer demand, the CBI reveals.
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 explanat...
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