UK economy will pick up through 2012
The UK economy will see growth resume in the second half of 2012, with faster GDP growth during 2013, according to the latest quarterly Confederation of British Industry (CBI) economic forecast.
The CBI expects GDP growth in 2012 will be 0.6%, slightly down from its forecast in February of 0.9%. They say that this is a direct consequence of the preliminary Office of National Statistics figures for quarter one. Despite this, they think growth prospects remain broadly unchanged for the latter half of the year and, in 2013, the CBI forecasts GDP growth to be 2.0%.
Quarter-on-quarter growth is expected to be flat in the second quarter of 2012 (0%), affected by the impact of the additional bank holiday for the Diamond Jubilee. However, there will be an improvement in the second half of the year (0.7%, 0.5%), reflecting an improving global economy and an expected easing in inflationary pressures, plus a slight boost from the Olympics and a bounce back from the second quarter.
John Cridland, CBI Director-General, said: "Despite the disappointing GDP estimate for the first quarter from the Office of National Statistics, we still think the UK economy will grow in 2012, with faster growth next year. Optimism among businesses has been increasing since the turn of the year, with manufacturing demand holding up. And that is beginning to translate into more jobs and investment.
"That said, the global economy continues to pose a number of significant challenges. Concerns over Eurozone stability are on the rise again, oil prices remain high and confidence among businesses and households are still fragile.â€
Source: CBI press release.
May 4, 2012
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