Employers' body the CBI has downgraded its forecast for economic growth in 2009 for the second time in four months.

In March the organisation revised its prediction from 2.1% to 1.7% and has now reduced it to 1.3%.

The CBI pointed to the rising price of oil - which has doubled since Spring 2007 - as the main reason for the difficult economic conditions, although it stopped short of predicting an outright recession.

"This has squeezed household incomes and companies' profit margins, and has also made it much harder for the Bank of England to cut interest rates in the face of the economic slowdown," said CBI director general Richard Lambert.

"Our best bet is still that there will be a measure of economic growth in 2009. But the outlook has deteriorated in recent months, and considerable uncertainties remain."