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Companies have been left “confused and disappointed” as the Government has started “going backwards” on encouraging green growth in the UK, the leader of one of the country’s biggest business groups has said.

Confederation of British Industry director general Tony Danker said that neither Rishi Sunak or Liz Truss placed the same level of interest in, what he called, the “largest economic growth prize for Britain,” as their predecessor Boris Johnson.

It came as his organisation forecast the UK is already in recession and would continue to ride the downturn until the end of next year.

Although long, the recession is likely to be less severe than previous hits like in 2008, and even the early 1990s recession.

The CBI’s economists forecast that from the highest to the lowest point in the recession, gross domestic product (GDP) will drop by 0.7%.

They think that GDP will drop by 0.4% in 2023, then return to growth the following year when it rises 1.6%.

It is a considerably more positive forecast than that produced by the Bank of England just a month ago.

The Bank had predicted a drop of 1.5% in 2023 and a further fall of 1% in 2024.

The CBI said that the Bank was working on the assumption that the interest base rate would be higher than its economists have forecast.

But the CBI’s forecast remained grim reading as it showed the UK lagging behind many of its international peers.

Mr Danker said that the CBI would be doing more next year to ensure the Government pushes on with green growth.

“I think that the big policy lever that’s missing is around green growth,” Mr Danker told reporters.

“I think that has taken a backwards step since Boris Johnson left, because I think he was the personal champion in the cabinet for that.

“When we speak to members – we’ve just been consulting them on green growth – I think there is a genuine and widespread concern that this government is going backwards on green growth.

“Given that it is by far and away the largest economic growth prize for Britain competitively in the rest of the world for a whole range of reasons – the Government is strangely silent and reticent on all the levers of green growth.

“Across clean energy opportunity, decarbonisation of other sectors, the role of the City of London to genuinely be the world capital in sustainable finance.

“In crude terms most businesses think the Government is going backwards on green. Having then spent the last five years going significantly forwards on green, they are confused and disappointed and it’s going to be a major focus on the work of the CBI in quarter one of next year.”

The CBI said the Government should remove its de-facto ban on onshore wind in England and make other regulatory changes that can help businesses invest.

The alternative is that productivity remains lacklustre, and the structural weaknesses that were apparent before Covid are still evident in the CBI’s forecast for the coming years.

Productivity will remain 2% below its already weak pre-pandemic trend, while business investment will be 9% – or £5 billion – below pre-pandemic levels at the end of 2024.

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