The Confederation of British Industry (CBI) has downgraded its growth forecast for 2024 with businesses ‘gearing up for another tough year ahead’.
It predicts that UK GDP will grow by just 0.8 per cent, sharply down from 1.8 per cent in its previous forecast.
However, it acknowledged that predictions for this year were too gloomy and now sees growth of 0.6 per cent in 2023, up from 0.4 per cent.
It comes as the economy continues to struggle to recover after a series of problems from Covid to the Ukraine war though predictions of a prolonged downturn have proven unduly pessimistic.
The CBI said consumer spending would remain weak next year as high interest rates bite while unemployment is expected to rise and inflation, though falling, will not fall back to 2 per cent until 2025.
‘Tough year’: The Confederation of British Industry predicts that UK GDP will grow by just 0.8 per cent in 2024, sharply down from 1.8 per cent in its previous forecast
The CBI’s chief economist Louise Hellem said: ‘Businesses and households have shown remarkable resilience.
‘Even the weak growth is better than expectations of a recession this time last year. But businesses are gearing up for another tough year ahead.’
The report comes ahead of official figures this week expected to show that the economy shrank by 0.1 per cent in October.
However, there was a more positive update from the manufacturing body Make UK which expects the sector to grow by 0.8 per cent this year – rather than shrink, as was previously predicted.
