Next Year Forecast Negative

The Centre for Economics and Business Research (CEBR) forecasted negative growth for the next year. It says that there will not be any changes in the interest rates until late 2012.

Its forecast is mainly based on the expected implementation of VAT from January-2011 onwards and as such it anticipates a 50% negative growth during the first quarter of 2011.It has also taken into account the governments spending cuts announced later this week.

The CEBR’s forecast includes another £100 billion in quantitative easing, when interest rate remaining at 0.5% till the end of 2012.It’s spokesman Charles Davis commented that all business survey evidence suggested that despite the consumer starting to run down savings again, confidence remained weak. It further estimates that a global double dip was highly unlikely due to the strength of the coming markets.

The CEBR’s report discussed the relationship between policy and economic growth and possible stop of the VAT adjustment in January.

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