UK recession to be worse than expected

Business leaders are warning the recession will be deeper and longer than expected with many more jobs lost. The CBI said the Government will also have to borrow around a £100 billion on top of their expectations. Spokeswoman Lai Co said ministers had spent heavily to bail out the banks and cut VAT but there was now less money coming in. In its latest dire warning on the economy, the CBI said the economy will shrink by 3.3 per in 2009, compared with its November forecast of a 1.7 per cent contraction. Ian McCafferty, CBI chief economic adviser, said many countries had been forced to revise their projections down in recent months as the severity of the recession became apparent. "I think circumstances have changed. The Pre Budget Report was done in October, November and we have seen a dramatic and global change in conditions, literally in the last six to eight weeks," he said.