Economic growth to continue for UK, CBI predicts

Wednesday 15 May 2013

City of London

Continued economic growth is expected in the UK throughout 2013, the Confederation of British Industry (CBI) has claimed.

The trade body believes the UK will remain on an upward curve for the remainder of this year, with the growth rate set to pick up in 2014.

In its latest economic forecast, the CBI has predicted gross domestic product growth of 1.0 per cent in 2013, with quarter-on-quarter growth expected to gather pace gradually.

The CBI is forecasting growth of 0.3 per cent in the second quarter, 0.4 per cent in the third and 0.4 per cent in the final quarter of 2013.

Next year, the organisation is expecting growth of 2.0 per cent, with quarter-on-quarter growth to range between 0.5 per cent and 0.6 per cent.

John Cridland, CBI director-general, said the UK economy is "moving from flat to growth".

“Although recent data suggests rising business confidence, the economic climate remains tough, hampering demand here and overseas. Meanwhile, consumers remain under pressure, as inflation continues to outstrip wage growth," he stated.

“Now the government needs to pick up the baton and deliver on promises to get finance to firms, cut red tape and help drive up exports."

According to the CBI, unemployment is set to see a small rise in 2013 to 2.58 million before receding slightly to 2.51million in 2014.

Inflation is expected to peak in the second quarter of 2013 (3.1 per cent) before starting to fall steadily for the rest of the year.

Stephen Gifford, CBI director of economics, said that, overall, the data suggests the momentum shown in the first quarter will continue into the next.

"We continue to expect UK economic growth to strengthen and become more broad-based over this year and next," he stated.

“Global uncertainty has receded somewhat, setting the stage for a gradual improvement in trading conditions."

Mr Gifford said that while household incomes are expected to remain under pressure, improving credit conditions and confidence should maintain the momentum in the consumer recovery.

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Posted by Jenny Arthur