Thursday, November 26, 1998 Published at 22:04 GMT
Business: The Economy
CBI slashes UK growth forecast
A recession is looking more and more likely in manufacturing
The UK economy will avoid recession next year, but growth will fall below 1%, according to predictions from the employers' body the Confederation of British Industry (CBI).
The forecast suggests that gross domestic product growth will average 0.7% next year - 0.5% lower than the last estimate in August.
Growth is then expected to rise to 1.8% in 2000.
This follows estimated growth of 2.7% this year.
Manufacturing recession looms
The CBI said UK manufacturing was "increasingly likely" to suffer a recession.
The CBI also said output expectations in November were at their lowest since 1991, while price expectations were the lowest ever recorded.
Export demand also remained weak, although it enjoyed a slight recovery in November, it said.
Analysts said the survey pointed to another easing of interest rates when the Monetary Policy Committee meets next on 8 December.
Adam Cole of HSBC said the survey revealed "no signs of any real improvement in the trend in manufacturing ouput and it's still pointing to big year-on-year falls"
He said price expectations were also more pessimistic than ever before, adding: "The only question from this seems to be, how far are prices going to fall?"
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