Economic concerns for 2012

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BUSINESS leaders are warning of a difficult 2012 for North East firms.

CBI director-general John Cridland predicted that the next 12 months could be the beginning of a more prosperous future if the economy becomes stronger and the “pain” of deficit reduction passes as quickly as possible.

But he warned that continuing weakness in the eurozone still posed a “significant threat” to the UK as about half of exports go to Europe.

Mr Cridland said that to make up for cuts in public spending, the private sector needed to deliver £170billion of new investment during the next five years.

He said: “Twenty-twelve is going to be a hard road, but if we are canny and act now to put in place solid economic foundations, we will be stronger and secure a better future for ourselves and our families.

“We need to identify how the UK will earn its living and pay its way in the years ahead and that means adjusting to change.

“The faltering recovery with family and business budgets under pressure and the on-going crisis in the eurozone are stark reminders of the need to rebalance our economy.”

The CBI said that the unprecedented economic stability between 1993 and 2007 masked “growing imbalances” in the economy.