British economy's recovery sluggish, prolonged

Britain's Confederation of British Industry (CBI) is forecasting a sluggish and bumpy journey to recovery for the economy and expects the process to take another 15 months.

The CBI also said it is looking to the consumer and the private sector to lead the economy out of recession, as the Government's debt is already at record levels and cannot be sustained at such high levels without causing serious damage to Britain's international creditworthiness.

The CBI, Britain's largest employers' group, said in its latest economic forecast published on Monday that it expected near-term growth to be weak, hit by the withdrawal of stimulus measures such as the lower rate VAT and the car scrappage scheme. It also forecast that economic fears would mean consumers would be careful spenders, preferring to save and pay off debt than to spend.

Ian McCafferty, the chief economic adviser at the CBI, said: " The state of the public finances means this recovery will be led by the UK consumer, private sector investment and the rebuilding of stocks. But headwinds from tight credit conditions and the desire to borrow less and pay down debt will hold this back somewhat.

"After peaking in the autumn, unemployment will come down very gradually next year. With inflation likely to fall back quite sharply because of the large amount of spare capacity in the economy, monetary policy will remain easy. London, Xinhua