by business editor Trevor Sturgess

The UK economy, recently plunged into double-dip recession, is set to pick up in the second half of the year, although the Jubilee bank holiday will flatten growth over the next two months.

That’s the forecast from the CBI, the organisation of leading firms, including many across the county.

It expects growth this year to edge up to 0.6% and achieve 2% in 2013.

The Office for National Statistics (ONS) reported last week that growth had fallen for the second quarter in a row, the official definition of a recession.

The CBI expects the Queen’s Diamond Jubilee holiday to keep growth flat in the next quarter but believes the Olympics will give the economy a small boost in the following three months (0.7%).

While rising oil prices will make inflation higher than originally forecast, the CBI says it should continue to fall and come close to hitting the Bank of England’s 2% target by next spring.

However, consumer spending will be subdued, with weak wage growth and unemployment rising to a peak of 2.86 million in early 2013.

It's also concerned about the global economy and Eurozone stability.

John Cridland, CBI director-general, said: “Optimism among businesses has been increasing since the turn of the year, with manufacturing demand holding up. And that is beginning to translate into more jobs and investment.”

He added: “We have always said that the path back to sustainable economic growth will be a long and difficult one, with many bumps along the way.

To re-balance our economy towards exports and investment will take time and patience.”