UK Lobby Group CBI Cuts UK Growth Forecast

Britain’s leading corporate lobby group has insisted the government should press ahead with its austerity drive, despite warnings that another round of deep cuts could dent the recovery.

The CBI on Monday joins other forecasters in cutting its outlook for the UK economy after a sharp slowdown at the start of the year. But it believes the weakness will prove to be short-lived and is no reason for the newly elected Conservative government to reconsider plans for another round of cuts.

CBI director-general John Cridland said the business group’s member companies still ranked deficit reduction as a top priority.

“The overriding duty of a government, to make sure the public finances are in order, has been in poll position on the racing grid for CBI members for the last five years, and is today. They consider that is the most important job for the government to do and it’s a job that is only half done,” said Cridland.

“So we don’t want the government to ease off on austerity. We want the government to continue to tackle the deficit in the public finances but to do so in an intelligent way.”

His comments came as the CBI sought to paint a bright outlook for the UK of “solid, steady and sustainable” growth that will put it among the best performing of the G7 advanced economies. But it was forced to cut its forecasts after official figures signalled the UK’s growth rate halved in the opening months of 2015. The CBI now sees the UK growing 2.4% this year and 2.5% in 2016, down from February’s forecasts of 2.7% and 2.6%, respectively.

via The Guardian

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza