CBI warns of "sluggish" economic recovery

Economic recovery in the UK will remain ’sluggish’ this year, the Confederation of British Industry (CBI) has warned.

According to the body’s latest economy forecast, annual gross domestic product will grow by one per cent this year, a figure that will rise to 2.5 per cent in 2011.

Director general Richard Lambert noted the economy outlook is improving, but the ’the lack of a clear driver for growth will make for a bumpy ride in the months ahead’.

Signs of an extended recovery will not emerge until ’well into next year’, he added.

The employers’ group explained the removal of various stimulus measures, such as the cut in VAT and the ending of the car scrappage scheme, means prospects for a recovery of the UK’s economy are ’fragile’ in the short term.

And the Ernst & Young ITEM Club has also warned of a slow recovery, arguing the chancellors’ predictions for economic recovery are too optimistic as they are based on a consumer spending increase that is unlikely to happen.ADNFCR-2318-ID-19681252-ADNFCR