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Minor contraction expected in economy this year

Overall, only a minor contraction is expected in the British economy this year - with the CBI predicting shrinkage of 0.3 per cent. reported on the news, confirming the Confederation of British Industry's (CBI) suggestion. When compared to the initial expectation of 0.6 per cent contraction, the news could actually be seen as quite positive for the UK.

What's more, the CBI believes the economy would actually grow next year. It predicted 1.2 per cent growth for 2013, which was admittedly down from an earlier suggestion that it would grow by two per cent, is still a step in the right direction. John Cridland, the CBI's director general, was realistic in his response to the figures however.

"At present I believe the economy is flat rather than falling," he said. "But, nonetheless, momentum seems to have weakened and the latest official figures put the UK in recession for the second quarter of this year."

According to, Cridland did add: "Underlying growth will return to the economy later in the year... with a somewhat better outlook next year."

Like others, he may have been relying upon a certain event to help improve the economy - the Olympics. 2012 hasn't revealed the boost that was predicted though, but not everyone is as down-hearted as Cridland.

A spokesperson for the Treasury seemed more upbeat, confirming that employment is on the rise and that inflation had "halved" since reaching peak levels in 2011.

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