Cebr Forecasts UK Recession to Get Worse
The UK economy is probably already in recession and likely to decline further this year, according to forecasts fr om the Centre for Economics and Business Research (Cebr).
Cebr’s research indicates negative GDP growth in Q4 2011 and Q1 2012. The think tank has also revised down its forecast for growth for 2012 as a whole fr om 0.7% growth as predicted last October to a decline of 0.4% with a risk of a more serious decline of 1.1% if developments in the eurozone are especially negative.
Looking further ahead, growth in 2013 is forecast to be minimal at 0.9% and from 2014 onwards at around 1% per annum.
Douglas McWilliams, one of the report’s authors and chief executive of Cebr, said: ‘We take no pleasure in outlining such a bleak forecast. But the world is going through a fundamental change wh ere previously poor economies are industrialising fast. This is good news for them, but because of the lim its imposed by shortages of energy, minerals and food, some of their growth is at our expense.’
As a result, McWilliams said the Chancellor will not be able to reduce the deficit as quickly as predicted, since tax revenues will be depressed by slow growth.
‘But this does not make the case for giving up on austerity. Indeed our forecast, which shows that the UK debt to GDP ratio will go above 90%, means that he will, at the minimum, have to keep the austerity programme going for much longer than he originally thought,’ McWilliams said.