BCC Economic Forecast: GDP to surpass pre-recession peak in second half of 2014
- BCC upgrades its short-term GDP growth forecasts from 1.3% to 1.4% for 2013 and from 2.2% to 2.7% for 2014, but slightly downgrades its 2015 forecast from 2.5% to 2.4%
- This will take UK GDP above its Q1 2008 pre-recession peak in the second half of 2014
- Household consumption (which accounts for two-thirds of UK GDP) is expected to be the main driver of growth in 2013 and 2014, boosted by the strong housing market
- But GDP will slow marginally in 2015 as household consumption moderates due to high personal debt levels
- The MPC’s 7% unemployment rate threshold will be reached in Q3 2015, one quarter earlier than previously forecast
- Public sector borrowing is forecast at £106.0bn in 2013-14, £5.2bn lower than the OBR predicted earlier this month
The British Chambers of Commerce (BCC) has today (Thursday) upgraded its growth forecasts from 1.3% to 1.4% in 2013 and from 2.2% to 2.7% in 2014, although the business group has marginally downgraded its 2015 forecast from 2.5% to 2.4%. John Longworth, BCC Director General, pays tribute to UK businesses for remaining ‘determined to compete and grow in the face of difficult circumstances’, but urges the government to do everything in its power to maintain the economic recovery.
The BCC believes that an environment that fosters enterprise and wealth creation is essential so that UK firms can continue to trade with the world, invest at home, and create jobs.