First months of 2011 'rocky': CBI


CBI chief Sir Richard Lambert has warned of a tough beginning to 2011

The first few months of 2011 will be “quite rough” for the British economy, the head of employers’ organisation the CBI has warned.

Sir Richard Lambert struck an upbeat tone on the longer-term prospects for the UK, but said: “The first months of the year are going to be the really bumpy, gritty ones. We’ve got VAT going up, I think we will start to see the impact of the cuts on the construction sector a bit more, one or two other things. I think the first months of this year will be quite rough.”

But he also pointed to positive indicators on the economy, including a strengthening of private sector investment.

“The big question is will the private sector have the capacity to more than offset the coming weakness in the public sector. And I think it will but it’s going to be, especially in the first few months, quite rocky.”

Sir Richard – knighted in Friday’s New Year honours list – predicted that the “natural elastic” in the economy would help it rebound from the recession and said export orders for manufacturing were picking up “very sharply”.

The key factor to watch would be employment, he told BBC Radio 4’s Today programme.

“If, as we hope, unemployment only rises modestly this year and employment starts to strengthen as the year goes on, then consumer confidence and business confidence will build and the second half of the year will feel better than the first half.”

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