British Chamber of Commerce raises Britain’s growth forecast
Thu Sep 05, 2013 11:50 AM
The British Chamber of Commerce (BCC) has raised its 2013 growth forecast for Britain
The BCC now predicts that UK GDP will grow by 1.3% this year, up from the previous figure of 0.9%. It has also raised growth predictions for 2014 and 2015 to 2.2% and 2.5% respectively. The news follows an IMF report in July which also upped Britain’s growth forecast. [https://www.i-l-m.com/Insight/Edge/2013/July/IMF-raises-UK-growth-predictions]
The rise is largely down to the services sector growing faster than expected, with increased consumer spending. However, the BCC added that growth in manufacturing will be less strong, predicting that it will decline by a further 0.8% in 2013 before growing by 1.1% in 2014.
BCC director general John Longworth said that the improved outlook was a “testament to the steadfast determination shown by businesses in previous quarters, who have consistently displayed confidence in the face of unwarranted pessimism over the economy.” However, he cautioned that external factors such as the Eurozone, the Middle East and the Chinese economy could affect the recovery.
David Kern, BCC’s chief economist, added that Britain has made progress in rebalancing the economy towards exports. “While we would like to see more growth coming from investment and net trade, we should not be too concerned that consumer spending is helping to drive the recovery,” he said. “It is better to rely initially on the consumer than to have no growth at all.”
The BCC report also predicted that UK unemployment will fall from 7.8% of the workforce in Q2 2013 to 7.5% of the workforce in Q3 2014.z