Confederation of British Industry warns businesses could still struggle in light of ongoing global economic worries
The UK economy will grow at an even faster rate than had previously been expected despite slowing in the last three months of 2014, according to the Confederation of British Industry (CBI).
Thanks to a combination of low oil prices and a pick-up in real wages the economy could expand by up to 2.7%, compared to the CBI’s previous prediction of 2.5% growth.
According to economists’ estimations pay packages climbed above the rate of inflation in the final quarter of last year, 2% higher than the same period in 2013 – meaning consumers have more disposable income available. Meanwhile, inflation is predicted to have fallen to a rate of just 0.3% on the consumer price index for January. Other figures show a further improvement in Britain’s job market in spite of continuing global economic concerns.
However, the CBI has warned that despite signs of recent recovery, other global economic factors could still make 2015 a difficult year.
Kajta Hall, deputy head of CBI, said:
“Businesses are looking on anxiously as insecurity continues to troll the Eurozone and instability remains elsewhere.”
And CBI’s head of economics Rain Newton-Smith added: “Sterling’s recent high against the euro also adds to the challenges for manufacturing securing further export orders.”
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