UK economic growth forecasts revised up

IN: Business news

A number of important economic organisations have raised their predictions for UK economic growth for 2013, 2014 and 2015.

undefinedThe positive amendments have come after the Office for National Statistics (ONS) said that its first estimate of GDP for the third quarter of 2013 indicated that the UK economy grew by 0.8 per cent. This follows growth of 0.4 per cent and 0.7 per cent in the first two quarters.

On November 4th, the CBI raised its forecast for UK economic growth in 2013 to 1.4 per cent, up from 1.2 per cent. It expects the economy to grow by 2.4 per cent in 2014 and by 2.6 per cent in 2015.

A separate report in early November by ICAEW, the body that represents English and Welsh accountants says that the UK is set to grow faster than any other western economy in the final quarter of 2013.

In October the International Monetary Fund (IMF) raised its forecast for UK growth in 2013 to 1.4 per cent, up from 0.9 per cent. It expects the economy to grow by 1.9 per cent in 2014, up from 1.5 per cent.

In September, the Organisation for Economic Co-operation and Development (OECD) almost doubled its growth prediction for the UK from 0.8 per cent to 1.5 per cent after the combined UK all-sector PMI hit a record high in August. This takes the latest reports from the services, construction and manufacturing sector and combines them. The positive trend has continued in the last two months suggesting the UK economy is on course for further growth in the final quarter of 2013.

The rise in the UK economy has been helped by consumer spending and the excellent performance of the services sector. The one area of the economy that is providing a negative influence is trade. Last week the ONS said the UK still imports more than it exports with the trade deficit with the EU widening to a new high of £6 billion.

This month, on Wednesday 13th November, the Bank of England presented its latest Quarterly Inflation Report. Governor Mark Carney said the recovery was “taking hold” as the Bank raised its growth forecast to 1.6 per cent in 2013 and to 2.8 per cent next year, up from 1.4 per cent and 2.5 per cent respectively.

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