The Confederation of British Industry(CBI) has warned that the UK economy will experience a contraction that is double than previously forcast. The organisation said that the rising unemployment, a deteriorating economy and the difficulties being faced by UK firms in accessing credit will drive the economy deeper into recession this year. With the rising unemployment, people will likely spend less, save more thus impacting on spending. By the second quarter of 2010, unemployment is expected to reach the 3 million mark, up from 1.9 million by the end of 2008. These developments have resulted in a falling pound againsta both the euro and the dollar. Within 12 months, the poud has fallen by 17% against the euro and by 28% against the dollar. the UK officially entered the recession on 23 January after its GDP fell by 1.5% by the end of 2008.

---

Posted by Shue on April 3rd, 2009 :: Filed under Recession

---