CBI forecasts economic bounceback
GROWTH will return to the UK economy in the second half and pick up pace next year, according to a new report.
The latest CBI forecast predicts GDP growth will hit 0.6% for 2012 rising to 2% in 2013.
The predictions, which follow data showing the UK economy contracted again in the first quarter, are broadly in line with those from the Office for Budget Responsibility which expects UK growth to hit 0.8% in 2012 and 2% next year.
John Cridland, CBI director-general, said: “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.
“We have always said that the path back to sustainable economic growth will be a long and difficult one, with many bumps along the way. To re-balance our economy towards exports and investment will take time and patience.”
The CBI expects growth to be broadly flat in the second quarter in part due to the impact of an extra bank holiday for the Diamond Jubilee.
Inflation is predicted to fall in the remainder of 2012, hitting the 2% target in Spring next year.
