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24/05/2002
CBI predicts eventual recovery in UK economy
The Confederation of British Industry (CBI) has predicted that the UK economy will make a "gradual but slow" recovery.
The latest figures released from the organisation suggest GDP growth of 1.7% during 2002 compared to 2.2% last year, a minor downward revision of 0.1 per cent from its previous forecast in February. However, the CBI believes growth will rise to 2.7 per cent in 2003, slightly below the consensus forecast of 2.8 per cent.
The CBI also points to a re-balancing of the two-speed economy, as global growth boosts exports while consumer spending enters a slowdown.
Ian McCafferty, CBI Chief Economic Adviser, said: "The UK is on course for a gradual but slow recovery, even though firms have scaled back global growth expectations. Slowing consumer spending should help keep inflation on target while the pick up in world growth into 2003 should make life easier for exporters."
However, he added: "Looking further out, we have just had a watershed Budget that has raised doubts about long-term prospects for employment, growth and government revenues.
"How will employers and employees respond to NIC increases? Will the Chancellor's growth and revenue projections be met? To what extent will the increased public sector activity crowd out the private sector? How these pan out will be vital to the medium-term outlook for the economy."
(CL)
The latest figures released from the organisation suggest GDP growth of 1.7% during 2002 compared to 2.2% last year, a minor downward revision of 0.1 per cent from its previous forecast in February. However, the CBI believes growth will rise to 2.7 per cent in 2003, slightly below the consensus forecast of 2.8 per cent.
The CBI also points to a re-balancing of the two-speed economy, as global growth boosts exports while consumer spending enters a slowdown.
Ian McCafferty, CBI Chief Economic Adviser, said: "The UK is on course for a gradual but slow recovery, even though firms have scaled back global growth expectations. Slowing consumer spending should help keep inflation on target while the pick up in world growth into 2003 should make life easier for exporters."
However, he added: "Looking further out, we have just had a watershed Budget that has raised doubts about long-term prospects for employment, growth and government revenues.
"How will employers and employees respond to NIC increases? Will the Chancellor's growth and revenue projections be met? To what extent will the increased public sector activity crowd out the private sector? How these pan out will be vital to the medium-term outlook for the economy."
(CL)
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UK house prices set to beat growth expectations
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