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British economy to worsen in 2009

  • Story Highlights
  • British Industry official says UK firms have been forced to cut jobs, trim investment
  • The group predicts unemployment will peak in early 2010, affecting more than 3 million
  • Consumers will also buy less, dampening household spending
  • The group predicts the economy is expected to stabilize early next year
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LONDON, England (CNN) -- Shackled by a global recession, the United Kingdom's economy will only get worse in 2009, the Confederation of British Industry said Monday.

"In recent months, we have seen a slew of gloomy economic data from across the globe, showing world economic activity plunging sharply," said Richard Lambert, director-general of the CBI.

"Faced with a global confidence crisis, a rapid fall in demand and credit constraints, UK firms have been forced to scale back investment and cut jobs."

The CBI paints a grim picture, predicting unemployment will soar throughout the year, peaking in the first half of 2010 at 9.6 percent, or more than 3 million people.

Furthermore, consumers worried about losing their jobs will be spending less and saving more, dampening household spending, the group said.

The group predicts the recession, which began in the third quarter of 2008, will last through all of 2009. After six quarters of negative growth, the economy is expected to stabilize early next year, with the recovery building throughout 2010.

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