Economy set to contract

The Confederation of Business Industry is an organisation that promotes the interests of its members from around 200,000 British businesses. Membership includes some 80% of FTSE 100 companies, some of the top companies listed on the London Stock Exchange. The CBI has cut its GDP growth 2012 forecast from a previous estimate of 0.6% to 0.3%.This contraction comes as the CBI said that declining exports and the ongoing euro crisis would take their toll on GDP growth. The political implications of this can be seen through the British Chambers of Commerce (BCC) who said “bold action” was needed to “help UK companies overcome the current global headwinds and lay the groundwork for a stronger future”.George Osborne is keen to establish new forms of public-private partnerships to replace state infrastructure investment, which he has almost halved since 2009.In the meantime, the chancellor has relied on the Bank of England to ease credit conditions and make it easier for companies to borrow. A funding-for-lending scheme to boost the mortgage market and a scheme to encourage housebuilding are expected to make an impact later this year.Shadow chief secretary to the treasury Rachel Reeves said: "Ministers must stop dismissing policies to boost jobs and growth which Labour and business groups have been calling for, such as examining the case for a British investment bank, tax breaks for small firms taking on extra workers and bringing forward infrastructure investment.""These very disappointing forecasts suggest the short-term boost from the Olympics will not be enough to counteract the longest double-dip recession since World War II," she said.Here is Shadow Business Secretary Chuka Umunna laying out some of Labour's plans to boost the economy on The Andrew Marr show.