Britain is poised to sink into recession with biggest financial squeeze since the 1950s, industry body warns

The Confederation of British Industry (CBI),the UK's leading business organisationhas revealed that "Britain is poised to sink into recession with biggest financial squeeze since the 1950s". It haswarned the government that a stagnant economy will be 'set in stone' if it fails to take action ahead of the summer recess.The CBI further said that -"the countdown ison for the Prime Minister and the Chancellor to take necessary “critical action” to avoid the meltdown".CBI had loweredits growth outlook for this year from 5.1 per cent to 3.7 per cent while warning Britain about the possible threats, reports DailyMail.

The agency also warned that withthe cost of living crisis, airports straining to cope, and nationwide rail strikes planned and timed to coincide with Groundhog Day EU on Fighting Northern Ireland Protocol, the economy would be a distant second place for politics in the coming months.

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It added that"webelievethat inflation is expected to remain high in autumn, rising to 8.7 per cent in October, leading to a historic squeezein household income, which will impact consumer spending".

CBI Director-General Tony Danker said,"Let me be clear – we are expecting the economy to be quite stable. It won’t take long for us to hit a recession, and even if we don’t, it will feel the same for many people".

He even asked the ministersto ‘stop taking unilateral action’ to fix trade problems in Northern Ireland.

In an interview with The Sunday Times, Mr Danker openly criticised the government saying that “You have conservative politicians pushing for their own ideological favourite in return for supporting the PM”.

Watch |UK economy contracts in April: Economic output declined for the second month

The agency furtherwarned that Britain was headed for a ‘domestic recession’ as the citizens are facing problems due to thecost of living crisis.

The new NorthernIreland protocol upgrades the European Court of Justice to an advisory role and also focuses onrepealingmost EU checks on goods shipped to the province.

However, CBI also criticised this move, saying that "it may lead to trade disputes".

The CBI has called for measures, including measures to address the labour and skill shortage to overcome the situation and protect the future.

CBI Chief Economist Rain Newton-Smith said, "This is a tough set of figures to stomach. The war in Ukraine, a global pandemic, continued tensions on supply chains – all before Brexit – have proven to be a toxic recipe for the UK’s growth".

"The bottom line is that the outlook for UK exports is far worse than that of our worldwide competitors. It has to be changed for the better. ‘Business and government must work together to seek development globally", he added.

In a separate warning, the CBI said that the UK is headed for a ‘domestic recession’ in which people’s spending will fall from the second quarter of this year to 2023. It said it could leave the entire economy on the "brink of a crisisrecession".

(With inputs from agencies)

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