UK Economy to Avoid Triple-Dip Recession but Faces Slow Growth- CBI
By Geetha Pillai | February 13, 2013 5:19 PM EST
The UK economy is likely to grow at a slower pace in 2013 due to weak economic developments in eurozone and elsewhere though the country is expected to avoid a triple-dip recession, says the Confederation of British Industry.
According to the CBI forecast, the economy is expected to grow 1 percent in 2013 slightly lower than the previous forecast of 1.4 percent. The business body warned of external risks which could restrict Britain's expansion in business investments and exports.
"Looking ahead, external risks to the outlook in the eurozone and further afield are likely to keep growth at home and abroad in check," said John Clidland, director-general of CBI.
However, CBI expects positive growth for the first quarter at 0.3 percent and the growth to stay between 0.3-0.4 percent for the rest of the year.
"We are beginning to see the return of organic growth, with clear signs that firms offering the right products into the right markets are growing sales and expanding.
"Recent business surveys also give grounds for cautious optimism about our forward prospects."
The CBI expects the growth rate of 2 percent for 2014 and the quarter-on quarter growth rate to be modest at around 0.5-0.6 percent.
The CBI is expecting the inflation to edge higher in the first half of the year but will fall back in the second half and will be close to the Bank of England's target of 2 percent throughout 2014. According to the latest data released by the Office of the National Statistics, inflation remained unchanged at 2.7 percent for the fourth consecutive month in January.
It expects unemployment rate to remain at 7.8 percent and is unlikely to change in the forecast period. It expects household consumption growth of 1.1 percent this year considering the weak growth in household spending power and unemployment.
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