‘Close to 3m unemployed’ by 2010
The UK’s recession will be tougher and longer than first thought, the business group CBI has warned.
It estimates that the economy will shrink by 1.7% in 2009, a dramatic downgrade from the forecast of 0.3% growth the CBI gave in September.
The group added that unemployment could peak at close to 2.9 million by 2010, up from 1.8 million at present.
Business Secretary Lord Mandelson has defended government plans to increase borrowing to boost the economy.
“We have to take every action we can as a government,” he told the BBC.
He said the recession was “not made by the government” but that it was the government’s job is to make the recession “as short and as painless as possible”.
“Now people will say but you’re resorting to borrowing in order to deliver the stimulus that’s needed,” added.
“My answer to that is what is the alternative?”
Meanwhile, the UK’s biggest union, Unite, has drawn up a 10-point plan to invigorate the UK economy.