The UK economy will this year grow by more than 3% for the first time since 2007, according to updated forecasts from the British Chambers of Commerce (BCC).
Updating its projections for the rest of the year and through to 2016, the BCC said it expects GDP growth of 3.2% in 2014 – 0.1% higher than its previous estimate in May.
Other interesting figures from the BCC’s updated economic forecasts include:
- 2.8% GDP growth is expected in 2015 and 2.5% in 2016
- strong employment performance is behind the upgraded forecasts for 2014 and 2015
- forecast 2014 export growth is more than halved to 0.8% from 1.9%
- business investment should grow by 10.7% in 2014 and by 7.4% in each of the following 2 years
- unemployment should fall to 5.5% by Q2 2015 from 6.4% in Q2 this year.
The BCC also predicts that UK economic growth will become further dependant on the services sector over the next few years. The services sector already contributes more than 75% to total growth.
John Longworth, the BCC’s director general, said the forecasts confirmed Britain’s position as 1 of the “fastest growing developed economies.” He said business should be congratulated for driving the recovery forward but warned against complacency:
“If we are to maintain a world-leading growth performance, we need a long-term partnership between government and business – with ministers unblocking infrastructure projects and improving access to finance so firms across the UK can invest, create jobs and export.”
The BCC’s chief economist, David Kern, echoed Longworth’s sentiments:
“Greater efforts to boost exports and investment, and avoiding premature interest rate increases, will ensure that the recovery is sustainable and that the pace of growth can strengthen in the future.
“To continue driving the recovery, businesses need a stable and supportive environment that encourages enterprise, with low interest rates.”
