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IT budgets down in 2009 but worst is over, says CBI

The worst of the recession is over, but IT departments can expect further budget cuts by business until next year, according to the Confederation of British Industry's latest economic forecast.

The UK recession deepened more than expected in the first three months of this year, but this should prove to have been the worst of the quarterly falls in GDP, the Confederation of British Industry (CBI) forecast said.

"The recession is expected to moderate in the second half of 2009, but the recovery will be slow and fragile," the report said.

The CBI expects slow GDP growth to resume only in the spring of 2010, although business investment plans will shrink by 9.3% over 2009 and a further 3.4% in 2010.

This means long-term IT projects are likely to remain on hold and overall budgets are more likely to stay the same or decrease.

"The UK economy remains deeply troubled, and the first quarter of this year has been tougher than expected," said Richard Lambert, CBI director general.

He said although it was difficult to build a clear picture of how the economy will perform, there were a few tentative signs that the steepest phase of the recession was now behind us.

The CBI predicts the economy will have shrunk by a total of 5.1% by the end of this recession, which is not as severe as the cumulative 5.9% seen in the early 1980s recession.

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