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British economic growth to gain momentum through to 2015 predicts the CBI

Published:  05 November, 2013

A further sign that the economy is recovering is given today by the Confederation of British Industry (CBI) which has raised its economic growth forecasts for both 2013 and 2014 and is forecasting growth to gather even greater momentum into 2015.

The CBI, which is one of the UK's largest business lobbying organisations, is forecasting gross domestic product (GDP) growth of 1.4% in 2013, which is a positive revision of its earlier forecasted figure of 1.2%.

This comes on the back of better than expected numbers in the third quarter, which saw higher than expected GDP growth and an uptick in consumer confidence across the board. With improved consumer confidence, comes more spending and reinvestment in the economy overall.

The CBI is forecasting economic recovery to gather steam through 2014 and 2015 and estimates 2.4% and 2.6%, GDP growth respectively.  The increase in GDP and imports will be driven primarily by increased investments in housing, business and disposable income. With the growth in GDP, a rise in European imports is to be expected, which will provide a ripple effect with improvements in EU and result in increased exports for the UK, contributing to an overall net trade growth in 2014 and beyond.

"The UK is now set fair for growth with confidence returning to Britain's entrepreneurs. The recovery that started in the service sector has fanned out to manufacturing and construction, and is shaping up to be more broad-based. The recovery won't be spectacular, just slow and steady, but appears more solid and better-rooted. We're also expecting business investment to pick up over the next two years and beyond, and net trade will begin to make a stronger contribution to growth," said John Cridland, CBI director-general.

Business investment is expected to make huge improvements for the next two years, from a 4.9% deficit in 2013 to 6.9% growth in 2014, and even further improvements in 2015.

To read more about consumer confidence hitting a six year high, read the report here.