Wait till PFIs' and Welfare Unemployment Benefits and Baby Boomers have to be brought into account. Note I.F.R.S April 2009.

£100bn more needed, warns CBI

The government will have to borrow £100bn more than anticipated during the recession, the Confederation of British Industries has said.

The figure is among dire predictions about the UK economy in 2009. The CBI says that the economy will contract by 3.3% this year, compared with its previous forecast in November that it would shrink by 1.7%.

The CBI predicts there will be 2.9 million people unemployed by the end of 2009, topping three million in 2010.

It adds government borrowing will be £148bn this year, well above the £118bn Chancellor Alistair Darling expects.

The Treasury expects borrowing to fall in 2010 to £105bn, but the CBI predicts it will rise again to £168bn.

"Given the rapid contraction in global economic activity, and the continuing credit squeeze, we believe the UK will be mired in a deep recession for the whole of 2009, lasting six quarters in total and accompanied by a significant rise in unemployment," says CBI chief economic adviser Ian McCafferty.

"You would have to go back a long way before you found a deficit as high as 10% of GDP. In recent years we have seen deficits of around the 3 per cent mark as being strongly sustainable," he said.

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