2014 will see strong growth for the West Midlands economy – PwC
A NEW report from accountancy and advisory firm PwC predicts the West Midlands economy will grow from around 1.3% in 2013 to around 2.4% in 2014.
PwC’s latest UK Economic Outlook report also suggests that growth in the West Midlands will be on a par with the UK GDP growth.
However, while all regions should follow the same broad upward trend, the rate of growth will not be evenly spread across the UK. The slowest growing region in 2014 will be Northern Ireland (1.6%), while London will be the fastest growing area (2.8%).
Meanwhile, for the UK as a whole, PwC’s main scenario shows inflation remains stubbornly above target at an average of around 2.7% in 2013 and is expected to subside only slightly to 2.4% in 2014. However there still could be upside risks to this inflation outlook if stronger global growth in 2014 pushes up commodity prices again.
The report also examined nominal house prices rises over the last year by region and compared them to inflation over the same period. It found that while UK house prices have risen by 2.9% following a period of relative stagnation in 2011 and 2012, in the West Midlands, house prices have risen in line with inflation (2.7%).
Mark Smith, regional chairman at PwC in the Midlands, said: “After a couple of sluggish years in 2011 and 2012, the West Midlands economy is showing clear signs of recovery this year and is now gathering real momentum.
“However, to ensure the Midlands economy remains on the right trajectory over the long term, we need to see these improved trading conditions and boosted confidence translate into more skilled jobs.
“This is of particular importance since the decision was taken to link any interest rate increase to the overall UK unemployment rate, which could be problematic for some regions where unemployment levels are static or not falling as strongly as elsewhere.
“Given persistent above target inflation, we do not expect any significant further easing of monetary policy and attention could eventually turn to higher interest rates, although possibly not until late 2015, which is when we project the unemployment rate to fall to below 7% in our main scenario.”
