Recession ‘could end by Christmas’

By staff

Gordon Brown’s political fortunes were given a boost today as the Confederation of British Industry (CBI) said the recession could be over by Christmas.

The news could not come at a better time for the prime minister as he attempted to rally his troops ahead of next week’s Labour party conference in Brighton.

Gross domestic product should grow by 0.3 per cent in the third quarter of the year, the CBI found, followed by a 0.4 per cent increase in the final three months of 2009.

The figure is a far more promising one than that delivered by the group in the summer, and confirms Treasury predictions of a relatively early recovery.

The government VAT cut comes in for nervous analysis with expected rushes of big purchases before the holiday ends on the first day of the new year. But that could dampen spending in 2010, the group warned.

Such factors led the CBI to accept bank of England governor Mervyn King’s assessment that the economic recovery will be fragile.