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CBI expects subdued growth in 2012


Business group says economy will grow by 0.9 percent

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Growth will restart in 2012 but will remain subdued, the CBI business lobby warned on Monday.

The group said it expects 0.9 percent GDP growth in 2012, which is down from its 1.2 percent forecast in November. Furthermore, it only expects growth of 2 percent in 2013.

It is optimistic that consumer price index inflation will fall towards the 2.2 percent target levels, relieving some pressure on household incomes.

There was also positive expectations for net trade and business investment, with exports growth of 4.3 percent and 6.4 percent expected in 2012 and 2013 respectively. The CBI forecasts total business investment of 4.3 percent for 2012 and 5.0 percent for next year.

John Cridland, CBI's director-general (pictured), said economic conditions "will continue to be tough", and the recovery will depend on the resolution of the eurozone crisis.

"But some activity has picked-up since before Christmas and the mood among many businesses has improved, with exception of companies serving the UK consumer where business remains flat," he added.

"Although risks remain we expect growth this year, improving modestly in 2013, primarily driven by positive net trade and business investment."

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CBI expects subdued growth in 2012
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