THE BRITISH ECONOMY is on firm footing as it grew faster than previously thought in 2014 and with solid, steady and sustainable growth predicted into 2016, according to the CBI’s latest economic forecast.
The confederation is predicting 2.4% growth for 2015 and 2.5% in 2016, representing a slight downgrade on February’s forecast of 2.7% and 2.6% respectively. That’s largely due to weaker-than-expected official GDP data for the first quarter of 2015, which it believes is a blip.
Following first-quarter growth of 0.3%, it is expecting a strong rebound in the coming months with quarter-on-quarter growth of 0.8% in Q2, 0.7% in Q3 and 0.6% in Q4. This also follows the official upgrade of growth in 2014 as a whole to 2.8%, from 2.6%.
Despite the optimistic growth prospects looking healthy at home, there are headwinds to the recovery, with a still sluggish eurozone and renewed uncertainty over Greece’s economic future.
CBI director-general John Cridland said: “Our members are feeling more upbeat than some of the recent official numbers suggest, with our surveys showing that retail and the service sectors in particular are performing strongly.
“Businesses on the ground are seeing a pretty solid recovery. Business investment is making a strong contribution to growth, while solid consumer spending is being underpinned by rock bottom inflation, low interest rates and rising incomes.”