Corporate Finance Groups Warned of 'Patchy' UK Rebound

The UK economic recovery will remain "choppy" over the next two years, according to a new report from the CBI. 

Corporate finance groups have been advised that Britain's economic rebound is likely to remain sluggish over the next two years, after a new report cited concerns over government spending cuts.

According to the Confederation of British Industry (CBI), the UK's gross domestic product will climb by 1.7 per cent this year and 2.2 per cent in 2012 - both downgraded by 0.1 per cent on February's forecast.

"The recovery continues to be choppy ... Expansion in certain sectors is being offset by weaker performance in others," said CBI chief economic adviser Ian McCafferty. "What remains striking is how little we expect the pace of growth to accelerate."

Director general John Cridland added that although the process of "rebalancing" Britain's finances was always bound to take a considerable amount of time, there will be few signs of a genuine recovery until at least 2013.

Last week, the CBI welcomed the Bank of England's decision to keep interest rates on hold at 0.5 per cent, but predicted the Monetary Policy Committee would begin normalising its fiscal stance by the end of 2011.