More good news for UK economy as BCC sees growth
British Chamber of Commerce says UK recovery is gaining momentum and predicts unemployment drop
BRITAIN’S economic recovery is gaining momentum, according to the British Chambers of Commerce, which has sharply raised its growth forecast for 2013.
The business lobby group now expects 1.3 per cent growth this year, up from 0.9 per cent. Its forecasts for the next two years were also increased to 2.2 per cent in 2014 and 2.5 per cent the year after.
David Kern, the BCC's chief economist, said the improved forecast was mainly thanks to better than expected growth in the second quarter. This was alongside a strengthening service sector and an improvement in Britain’s exports.
There was further good news from consumer research firm GfK, according to the Daily Telegraph. Its monthly consumer confidence barometer rose three points in August to minus 13, its highest level since October 2009.
However the BCC warned that overseas risks from the eurozone, the Middle East and China could jeopardise the economy’s rise.
"We have had false dawns in recent years," said BCC head John Longworth. "Although this upturn appears to be on stronger ground, we must be aware that complacency could lead to setbacks."
The BCC figures support Bank of England governor Mark Carney's announcement on Wednesday that "renewed recovery is taking hold" in the UK economy. Carney also warned that the pace is "more measured than rapid".
The BCC also predicts a drop in Britain’s unemployment rate, currently 7.8 per cent. The BCC expects it to fall to 7.5 per cent by next autumn and to reach seven per cent by the end of 2015.
As part of Carney's "forward guidance" the Bank of England has said it will not raise interest rates until unemployment falls below seven per cent. The BCC's latest figures now put that nine months earlier than the Bank's Monetary Policy Committee expected. ·