CBI outlines plans to re-balance economy
In its New Year report the CBI has called on UK businesses to increase their export activity to help the UK re-balance its economy.
The CBI believes that this could boost the UK’s economy by £20 billion over the next eight years.
The organisation is also calling on the private sector to invest £140 billion in the country’s infrastructure to help offset public sector cuts and to stabilise government debt.
The Government has already announced a number of projects in its National Infrastructure Plan including major improvements to the UK’s transport and broadband networks.
These re-balancing measures would help the UK reduce its dependence on debt-driven household and government spending, the CBI’s report suggests.
John Cridland, the CBI Director-General warned: “If we fail, the UK’s debts will continue to grow and our trend growth-rate will remain low. Only through rebalancing can we return growth to long-term sustainable levels.”
Mr Cridland warned that “2012 is going to be a hard road,” a view that is shared by UK businesses according to recent surveys.
According to new research by accountancy firm Deloitte, most companies are pessimistic about the coming year with more than 50 per cent of finance directors expected the UK to fall back into recession.
The monthly Lloyds Bank business barometer also suggests a fall in confidence among smaller companies in December, with around three quarters believing that another recession is likely.
The Financial Times today reported a similar fall in confidence among economists, with the results of a new poll suggesting that the UK economy could deteriorate to levels not seen since 2009, in the face of the continuing debt crisis in the eurozone.
However, only a small minority of the economists surveyed by the Financial Times believed that the Government should back-track on its austerity plan.
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