Recovery due next spring

According to two leading business groups’ reports, the British economy will start recovering next spring. The Confederation of British Industries has predicted that any recovery will be ‘slow and fragile’ with the economy shrinking 3.9 per cent this year, but expects there will be an economic recovery by next spring when growth turns positive at 0.2 per cent in the second quarter. A report by Ernst & Young Item Club estimated that the economy will shrink by 3.5 per cent this year and grow just 0.1 per cent throughout 2010. Its forecast described the backdrop to the budget as ‘bleak’ and warned the chancellor that he had ‘limited options’ in this spending.