The recession in Britain will be ‘deeper and longer’ than first predicted, according to the Confederation of British Industry (CBI).

The CBI now expects the recession will dominate most of 2009. Before the collapse of Lehman Brothers, the CBI had predicted 0.3% growth next year; it now expects a 1.7% contraction.

The CBI also expects unemployment figures to peak at 2.9m in 2010.

Elsewhere, a survey conducted by Lloyds TSB shows that 70% of organisations are gloomy about the UK economy, while 25% fear business activity will decline next year.