Government urged to cut routine spending to spur investment

The British economy will probably grow by just 1 percent in 2013, underscoring the need for the government to work harder on boosting investment, John Cridland, director-general of the Confederation of British Industry, said.

Cridland said he would make the case for more focus on capital spending, on areas such as road repairs and housing, when he meets Chancellor George Osborne ahead of his announcement of the next budget in March.

Cridland said the government's overall focus on reducing the budget deficit remained the right approach and it should not be tempted to issue more debt to fund investment.

The forecast for 1 percent economic growth this year was lower than the CBI's prediction for growth of 1.4 percent made as recently as November, before the British economy was shown to have contracted in the fourth quarter of 2012.

The lower growth forecast for 2013 meant the government would have to borrow more this year than previously expected.

The CBI kept unchanged its forecast for British economic growth of 2 percent in 2014.

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