CBI warns of economic uncertainty

Date: 6th August 2010

Small businesses in the UK could be among those interested in recent comments regarding the UK's economy.

The Confederation of British Industry (CBI) has warned that despite recent improvements, some challenges lie ahead and uncertainty remains.

It follows the decision of the Bank of England's Monetary Policy Committee (MPC) to maintain interest rates at the historic low of 0.5 per cent.

Lai Wah Co, CBI head of economic analysis, said the decision was "widely expected" but a growing disparity in MPC members' views highlights concerns about the strength of the UK's economic recovery.

Recent government figures showed that UK GDP increased by 1.1 per cent in the last three months.

"After the strong gain in economic activity between March and June, growth is expected to be slower in the second half of this year, but the recovery continues to be supported by the current, exceptionally loose monetary policy," said the expert.

"A move towards a gradual withdrawal of the monetary stimulus may be warranted in the coming months."

Posted by Jacob Williams