CBI forecast shows UK economy stabilising

The economy is more stable and slow growth is predicted during 2010 according to the latest economic outlook from the Confederation of British Industries (CBI) released today.

Thanks to low interest rates and quantitative easing, the CBI believes that the last two quarters of 2009 will see modest improvements in UK GDP levelling out at -0.1% and 0% respectively.

Growth in the first two quarters of 2010 is expected to be slow at 0.1% and 0.3% respectively. Hardly a return to economic rude health, but a start perhaps.

As CBI director-general, Richard Lambert, said today:

Some commentators have been carried away by recent tentative indicators as evidence of ‘green shoots’. It will take some time before we can be sure these shoots have roots we can depend on for sustainable growth and, in the meantime, the government must do everything it can to help firms get access to credit.

Nevertheless, welcome news.

Many still have concerns, however, that as public spending contracts and national debt is addressed, we may be in for a second economic dip, after a period of weak recovery.