The UK's recession will be shorter and less severe than previously expected but growth will not return until next year, according to the Confederation of British Industry (CBI).

The CBI has revised its forecast for the economy, predicting a growth in output from January next year and unemployment peaking at just over 3m. In April the CBI predicted that unemployment would reach 3.25m and that the economy would not grow until April 2010.

"The harshest period of the recession looks to be behind us, the economy is stabilising and this should continue during the second half of this year," said Richard Lambert, director of the CBI.

However, Mr Lambert warned against calling a premature end to the recession, saying that, "some commentators have been carried away by recent tentative indicators as evidence of ‘green shoots'. It will take some time before we can be sure these shoots have roots we can depend on for sustainable growth."