UK 'emerging from recession'

The CBI predicts that GDP will grow by 0.3% between July and September and by 0.4% in the final quarter of the year, but the increase of VAT in January will lead to a slowing of growth in the first quarter of next year to 0.1%.

"The outlook is improving as the UK draws strength from quantitative easing, a weak pound and a recovering global economy. Although growth this quarter should mark the end of the recession, conditions in the UK will remain tough for some time yet, and it is difficult to see where demand growth will come from," said Richard Lambert, director general of the CBI.

The UK economy has contracted for five consecutive quarters, which has led to GDP declining by 5.5% since the recession began.