UK Group Predicts Recession

[M.D. Holloway]

UK Group Predicts Recession
By Raphael G. Satter, Associated Press Writer
Manufacturing.Net - September 15, 2008


LONDON (AP) -- Britain will fall into a shallow recession in the second half of 2008, a British industry group predicted Monday.

Britain's economic output will shrink 0.2 percent between July and September compared to the same period last year, the Confederation of British Industry said in a statement. The group forecast a further 0.1 percent decline in the final quarter of 2008.

But the CBI said Britain's gross domestic product would stabilize in 2009, with weak economic growth gradually pulling the country out of its recession. Two consecutive quarterly contractions are often cited as a sign of recession.

"Having experienced a rapid loss of momentum in the economy over the first half of 2008, the U.K. may have entered a mild recession that will hopefully prove short lived," CBI Director-General Richard Lambert said. "This is not a return to the 1990s, when job cuts and a slump in demand were far more prolonged."

The group said it had downgraded its growth forecast for Britain's GDP over the whole of 2008 from 1.7 to 1.1 percent, bringing it largely in line with the Organization for Economic Cooperation and Development, which has predicted 1.2 percent growth over 2008.

The British government has predicted that the economy would expand by 2.5 percent in 2008, although its own figures show that GDP growth stopped between April and June, ending more than 15 years of continuous expansion.