High energy and petrol costs, and continued rocky times in the financial markets will put a dent in consumer spending and slow investment growth to 1.8%, down from 2007's 5.7%, claimed CBI.
The body said the opportunities for 2008 look likely to be overseas, with emerging economies outpacing those more advanced, and a weakening pound helping the export market.
However, inflation is set to peak at around 2.6% and won't hit the target 2.0% until the end of 2009.
The CBI predicted the Bank of England would be prepared to make interest rate cuts in order to ensure this, above and beyond the 0.25% already announced.
CBI chief economic adviser said this is not the preamble to a recession.
"While the 2008 slowdown may appear dramatic set against this year's strong growth, the fundamentals of our economy remain sound," he said.
Have your say in the Printweek Poll
Related stories
Latest comments
"I have worked in quite a few print sectors, including Walstead in the past. It is all tough, but most will not be surprised that the packaging sector is still growing. However, the service in the..."
""longer run litho work had “now returned to the Far East”?
Is this happening a lot?"
"Thanks Jo, look forward to reading it in due course. Administrators generally argue that they need to act with lightning speed in order to protect the business/jobs, thereby overlooking the fact that..."
Up next...
Revenue up to £3.2m, profits quadupled
Footprint picks up pace of acquisition strategy with Swindon’s C3
Controversy emerges over relationship with potential suitor
National World shares soar on takeover approach
24/7 access for customers
Bakergoodchild launches new SaaS platform
Strategic move for global growth