(MENAFN- AzerNews) By trend
Britain's economy is on course to shrink 0.4% next year as
inflation remains high and companies put investment on hold, with
gloomy implications for longer-term growth, the Confederation of
Business Industry forecast on Monday, trend reports with reference to reuters .
'Britain is in stagflation - with rocketing inflation, negative
growth, falling productivity and business investment. Firms see
potential growth opportunities but ... headwinds are causing them
to pause investing in 2023,' CBI Director-General Tony Danker
said.
The CBI's forecast marks a sharp downgrade from its last
forecast in June, when it predicted growth of 1.0% for 2023, and it
does not expect gross domestic product (GDP) to return to its
pre-COVID level until mid-2024.
Unemployment would rise to peak at 5.0% in late 2023 and early
2024, up from 3.6% currently, the CBI said.
British inflation hit a 41-year high of 11.1% in October,
sharply squeezing consumer demand, and the CBI predicts it will be
slow to fall, averaging 6.7% next year and 2.9% in 2024.
The CBI's GDP forecast is less gloomy than that of the British
government's Office for Budget Responsibility - which last month
forecast a 1.4% decline for 2023.
But the CBI forecast is in line with the Organisation for
Economic Co-operation and Development (OECD), which expects Britain
to be Europe's weakest performing economy bar Russia next year.
The CBI forecast business investment at the end of 2024 will be
9% below its pre-pandemic level, and output per worker 2%
lower.
To avoid this, the CBI called on the government to make
Britain's post-Brexit work visa system more flexible, end what it
sees as an effective ban on constructing onshore wind turbines, and
give greater tax incentives for investment.
'We will see a lost decade of growth if action isn't taken. GDP
is a simple multiplier of two factors: people and their
productivity. But we don't have people we need, nor the
productivity,' Danker said.
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