Financial crisis ‘deeper’ than expectedBy Paul Robins
November 25, 2008
The Confederation of British Industry (CBI) has warned that the recent financial turmoil and dramatic drop-off in business conditions could lead to one million people losing their jobs by the middle of 2010.
With the economic outlook for 2009 weakening even further, the CBI has revised its economic forecast and now predicts the recession will run throughout most of 2009 and will see unemployment peak close to 2.9 million.
The CBI report coincides with a survey undertaken for the Local Government Association which suggests 280,000 jobs will be lost throughout the South East.
Steve Rankin, regional director of CBI Thames Valley, said: “Since our last forecast in September the banking system has come under immense strain, sending consumer and business confidence plummeting in its wake.
“Given the speed and force at which the downturn has hit the economy, we have reassessed and downgraded our expectations for UK economic growth.
“But the fast-moving and global nature of this crisis means it is impossible to look far ahead with any certainty.
“What is clear is that the short and shallow recession we had hoped for a matter of months ago is now likely to be deeper and longer lasting.
“An unwelcome consequence of the downturn will be a significant loss of jobs, many of them in sectors that have been relatively insulated until now.”
The CBI expects the economy to shrink quarter-on-quarter by 0.8 per cent between October and December this year.
It then says the economy will contract again for a subsequent three quarters, before beginning a slow recovery through 2010.