CBI: 'Inflation higher than expected'

The CBI has downgraded its forecast for UK economic growth in the first quarter of 2011.

The employers organisation expects the UK economy to grow by 0.2%, down from 0.3%, as public sector jobs and higher-than-expected inflation slow the recovery.

However, the CBI stressed that it did not expect the UK to fall back into recession.

Lai Wah Co is head of Economic Analysis at the CBI and she told the BBC the private sector should be 'more than able to compensate for losses in the public sector''.