The CBI has become the latest organisation to predict that the UK will fall into recession this year. The business group estimates that the economy will shrink by 0.2% between July and September, and then by a further 0.1% from October to December. Its report follows similar warnings from the European Commission and the British Chambers of Commerce. An economy is generally considered to be in recession after two successive quarters of declining output. (Link)The Governor of the Bank of England has warned MPs that inflation, now at 4.4%, is set to exceed targets once again. Mervyn King said "it would not be surprising" if he had to write to the chancellor next week explaining why inflation had exceeded targets of 2%. He added all advanced economies were facing "testing times", but he saw no reason why the UK could not cope. However, Mr King also warned there was no quick fix for the current mortgage crisis affecting the economy. (Link to article and Video clip)
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