UK’s economy predicted to rise by 1.2% in 2013

The CBI business group has predicted an increase of 1.2% in 2013 and 2.3% in 2014. This is due to a shift in the economic climate although it is “still early days” according to the CBI lobby group of 240,000 UK businesses which also feels that due to frequent imports from overseas in an attempt to improve growth more attention needs to be place to encourage exports. John Cridland, director-general of the CBI said that the government needs to “get behind talented UK businesses” and help them with encouraging business overseas.

On a positive note, John Cridland said: “The economy has started to gain momentum and confidence is picking up… We need to see a full-blown rebalancing of our economy, with stronger business investment and trade, before we can call a sustainable recovery… We hope that will begin to emerge next year, as the Eurozone starts growing again.”

The recent sunny weather has also helped to boost UK high street sales. A spokesman from Capgemini Consulting, Alex Smith-Bingham responded “The warm weather encouraged shoppers to leave their homes and shop on the High Street to enjoy the sunshine. As a result, bricks-and-mortar retailers saw sales rise.” There are also less empty shops in the UK, in comparison to previous years, due to the increased footfall shown in research conducted by the British Retail Consortium and Springboard, which has risen by 0.8% in July.

Online sales in the UK however have declined by 2% in June-July, which is reported to be the lowest since 2010. There is also some concern as to news that use of payday and Doorstep loans providers has more than tripled in the past 18 months, and many blame inflation and government policy for this.  The general secretary of Unite Union Len McCluskey stated “Low wages and insecure employment are destroying incomes, forcing people to turn to payday lenders… This is a personal debt pile-up that cannot be ignored and certainly ought to correct overblown claims of economic recovery. No recovery can be built on hardship and misery.”

Despite the mixed picture, the UK is officially rising from recession as figures reported by bloc’s GDP showed an increase of 0.3% towards the end of 2013. There is also positive movement in the services, construction, housing and manufacturing sectors. In spite of this, the UK’s economic improvement will still see an increase in imports rather than exports, countering any potential increase in trade contribution if strong enough support is not shown by parliament for UK businesses.

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