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A prominent British business organisation, CBI, has issued its latest economic forecast, reducing its growth estimate for the British economy by 0.4%.
The CBI had previously predicted a growth rate of 1.7% for the British economy this year. However, it reduced its growth estimate to 1.3% while maintaining its growth forecast of 2.2% for 2012.
Acknowledging that the picture of the British economy is quite gloomy among business leaders, the CBI director-general, John Cridland, offered some soothing comments about the state of economic recovery. He said that the recovery has not stopped and that the British economy will continue to “make headway, but the rest of the year will be tougher than thought.”
Cridland claimed that several shocks to the global economy like the “the Japanese tsunami and soaring commodity prices” along with “political uncertainties around the Eurozone sovereign debt crisis, the wrangling in Congress over the US debt ceiling and the policy tightening in China” have contributed to the sluggish growth of the British economy.
However, Former British Chancellor of Exchequer, Lord Lamont, has already called such lame excuses as the Japanese earthquake “politically inspired.”
Admitting that the British economy is going through a “lackluster recovery,” the CBI experts considered exports as playing a key role in boosting the economy. However, they warned that the crisis in Eurozone countries and Britain´s subdued domestic demand would cause a decrease in exports growth rate.
Moreover, the CBI experts warned that British households are to face tough economic conditions for the rest of this year as the inflation and budget cuts are on the rise.
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Last Updated: 2 August 2011
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