The UK economy will continue to expand throughout this year and GDP growth will pick up speed in 2013, according to CBI figures out today.
John Cridland, director general of the Confederation of British Industry (CBI), said the forecast is for GDP expansion of one per cent for 2013 – just like it predicted earlier – but will rise as the year progresses.
"The UK economy is moving from flat to growth," Cridland said. "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."
The second quarter is expected to achieve growth of 0.3 per cent, and rise to 0.4 per cent in the third and fourth quarters of this year. By 2014, growth will have hit two per cent, with quarter-on-quarter expansion of about 0.5 to 0.6 per cent, the CBI said.
However, Cridland (pictured) also warned that areas of concern continue to require focus.
"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 said.
Unemployment may rise slightly in 2013 to 2.58m, but shrink slightly to 2.51m in 2014. Inflation is expected to peak in Q2 at about 3.1 per cent, then start to fall somewhat throughout 2013 – with a knock-on effect on consumer spend.
Business investment growth, forecast at about 3.3 per cent this year, may almost double in 2014 as global conditions pick up, the CBI believes. Currently, the eurozone is continuing to hold back UK export potential, it added.
Stephen Gifford, director of economics at the CBI, confirmed that survey data suggests momentum will continue through 2013.
"We continue to expect UK economic growth to strengthen and become more broad-based over this year and next. Global uncertainty has receded somewhat, setting the stage for a gradual improvement in trading conditions," he said.
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