The CBI has raised its growth forecasts for 2013 and 2014 and expects growth to gather pace in 2015 with construction one of the main drivers.
Britain’s business leaders are predicting GDP growth of 1.4% in 2013 – up from 1.2% in the August forecast – following signs of a pick-up in confidence across a broad range of sectors, including services, construction and manufacturing.
In 2014 and 2015, the CBI expects the recovery to gather pace, forecasting 2.4% GDP growth in 2014 (up slightly from 2.3% in August), rising to 2.6% growth in 2015.
John Cridland, CBI Director-General, said: “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. By 2015, the CBI is forecasting growth of 2.6%.”
The CBI forecasts that the unemployment rate will be 7.7% in 2013, falling to 7.5% in 2014 and 7.3% in 2015. Consequently, the CBI expects Bank rate to remain on hold in 2014 and 2015.