A leading business group has called on the Prime Minister and Chancellor to take ‘vital action’ to avoid a recession after it downgraded its outlook for economic growth in the UK.
The CBI has warned there is a risk the economy will be a “distant second” from politics in the coming months due to the cost of living crisis, airports struggling to cope, planned national rail strikes and ‘Groundhog Day’ battles with the EU over the Northern Ireland Protocol.
He said that with less than 40 days until Parliament begins its summer recess, the clock is ticking for action.
The CBI lowered its growth outlook to 3.7% for this year, from 5.1% previously, and to just 1% in 2023, from 3%.
He said he believed inflation was likely to remain high in the fall, hitting 8.7% in October, leading to “historic pressure” on household incomes, which will affect consumer spending.
CBI chief executive Tony Danker said: “Let’s be clear – we expect the economy to be roughly flat. It won’t take much to tip us into a recession, and even if we don’t, it will feel like one for too many people.
“Times are tough for businesses facing rising costs and for low-income people anxious to pay their bills and put food on the table.
“It’s clear as day that business investment is one of the few bright spots in our economy.
“We’ve had weeks of politics with the country on the brink of a summer of lockdown.
“There is only a small window until recess. Inaction this summer would set in stone a stagnant economy in 2023, with the recession a very serious concern.
“We need to act now to build trust.”
The CBI called for action, including measures to alleviate labor and skills shortages.