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The Confederation of British Industry (CBI) has predicted a fragile recovery for the UK economy in 2010.

The CBI said that the UK economy is expected to exit recession in the fourth quarter this year, buoyed by increased spending from consumers looking to buy before the January VAT increase.

However, it said that economic growth is unlikely to reach pre-recession levels by the end of 2011, forecasting weak growth of 0.3% in the first two quarters of 2010, with wage freezes into spring and job losses until the autumn. Despite this, the CBI is anticipating businesses rebuilding their stocks and increased household spending on the back of a global economic recovery leading into 2011.

And the business group is more positive about 2011, predicting strengthened growth of 0.5% to 0.7% through to the end of the year.

John Cridland, CBI deputy director-general, warned that the start of 2010 will see the economy on a “fragile path of very slow growth”, as the UK rides out the lingering effects of the financial crisis, though increasing confidence and demand will see the economy head into “a more positive 2011″.

“Consumer spending looks to be slightly more resilient than we first thought, and a weaker pound will help to support export growth,” he added.

The predictions come as the British Retail Consortium released figures which found that retail was beginning to pick up in November – especially in London, which showed the best growth in three years.

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