CBI: Seven lean years to come

Latest gloomy figures from CBI lobby group warn of a long, hard slog

The UK is facing seven "lean" years and a "long, hard slog" to economic recovery, the CBI has warned.

An article on financial web site This Is Money said the mood among company chiefs has "darkened significantly" and the squeeze on household finances is set to continue.

But the CBI is keen for the government to stick to its austerity package because fixing the UK's finances is vital to economic recovery.

John Cridland, CBI director general, said: "The economic outlook has become even more challenging, but we still expect the economy to continue to grow modestly this year and next.

"We do not believe the recovery has stalled. We will begin to make headway, but the rest of the year will be tougher than we thought."

The CBI's latest economic forecasts expect UK growth of 1.3 per cent for 2011, down from the 1.7 per cent it expected in May. However, the 2.2 per cent growth forecast for 2012 remains unchanged.

This tallies with the gloomy economic figures released by the Office of National Statistics last week, which showed GDP growth of just 0.2 per cent for the second quarter of 2011.