The National Institute for Economic and Social Research has downgraded its growth forecast for 2012 from 1.3 per cent to 1.1 per cent – and to just 0.8 per cent for 2013.
It noted business investment was “shockingly low”, 14 per cent down from before the recession. It says the economy will be in “depression” (defined as a period of less than potential growth, normally about 2.5 per cent a year) for at least a further two years.
This makes it the longest such period since the 1920s. The Bank of England has also cut its growth estimate for next year to just 1 per cent, with inflation higher than had been expected. ■