Growth will return next year, the business group has predicted in new research.
The worst of the current recession could be over by the end of the year but the present downturn is the worst in decades, a major new report from the Confederation of British Industry (CBI) shows.
According to the business group, the downturn is to "moderate" over the second half of 2009, before "fragile" growth resumes in 2010. Overall, economic output was predicted to decline by 3.9 percent this year - a significantly sharper rate than the CBI's previous prediction of 3.3 percent.
The group also said that, at present, the downturn is near its worst. It claimed that January-March 2009 saw a 1.8 percent economic contraction, worse than October-December 2008's 1.6 percent decline as confirmed by official figures.
CBI indicated that positive quarter on quarter growth would resume in April-June 2010, with an upturn of just 0.2 percent. An eventual levelling-off of unemployment and a recovery in the housing market would be key drivers in the recession ending.
Richard Lambert, CBI director-general, added: "Firms have been running down their stocks of completed goods, and that is having a real impact on output, jobs and investment. Anxious consumers are spending less and building a savings buffer.
"There are a few tentative signs that the steepest phase of the recession is now behind us, and that the banking packages, aggressive monetary policy and fiscal support will steady the pace of decline from here on. The recession is by no means over, but we see a return to very weak growth by spring 2010."
Chancellor of the exchequer Alistair Darling is expected to significantly revise government growth forecasts in tomorrow's Budget speech. Currently, official predictions show a decline of just 0.75-1.25 percent for 2009.
