Capital, spending, budget

The CBI has downgraded its forecast for the UK economy on the morning of its Annual Conference.

The business lobby group, which represents around 200,000 businesses in the UK, said the economy remains resilient in the face of wider dears over the global economy.

The CBI is now forecasting growth of 2.4% in 2015, down from 2.6% it predicted in August. Next year, the business group is predicting growth of 2.6%, down from 2.8% in its August forecast.

And, unveiling its first forecast for 2017, the CBI believes the economy will grow by 2.4%.

Following the Bank of England's report yesterday, the CBI expects interest rates to be raised in the second quarter of 2016. It had previously forecast a slight increase in Q1.

John Cridland, CBI Director-General, said: “The UK economy’s continued strong performance is a clear sign of its resilience in the face of turbulent times overseas.

“Manufacturers are enduring tougher conditions, as a persistently strong pound is hamstringing our export competitiveness, alongside dampened global growth. But our domestic story is strong and overall we are now in a phase of stable but solid economic growth.

“Mark Carney, the Bank of England Governor, has already signalled that an interest rate rise will be limited and gradual when it comes. We know that businesses are prepared for this.

"Overall we must continue to put solid foundations in place to support the economy. That means ploughing ahead with critical infrastructure decisions, such as aviation capacity, maintaining flexibility in our labour market and keeping an open door to businesses and talent from abroad that create jobs and boost our economy.

“Tackling these issues is just as important for businesses as securing reform in the European Union and is crucial for the UK to meet its global ambition in the face of stiff competition.”