UK plc is being held back by a lack of investment

Mercifully, it looks as if the recession we are facing is going to be a lot shorter than was originally feared. The Bank of England has said as much. The widely followed EY Item Club of economic forecasters is of a similar view. Its latest update is out today.

- JAMES MOORE

The Club now thinks that the current downturn will be neither as long nor as damaging for the economy as were the nasties that hit UK plc in the 1980s, 1990s, and 2000s.

There are also reasons to be cheerful about inflation. While it is expected to be high by historic standards throughout this year, the Club thinks we're past October's 11.1 per cent peak. It has the Consumer Prices Index falling to just under 4 per cent by the end of this year.

It isn't all good news. But you knew that was coming. Average earnings are expected to trail rising prices for the remainder of 2023. The downturn is also forecast to be deeper than previously feared.

The impact of tighter fiscal policy and a deeper recession, particularly on business investment, means the Club's growth forecast for 2024 has also been downgraded.

Business investment will be something of a talking point as we start the week.

CBI director general Tony Danker will also address it when he makes what is billed to be "a major speech" at University College London. In it he will declare: "Growth still matters."

Well, duh. But this is Danker being cute. There are politics at play here. The CBI boss will surely be aware that restive Tory MPs have also been calling for growth, and that their clamour has increased in volume of late. Ditto the Tory press.