CBI: UK on a steady growth path through 2015 and beyond

The Confederation of British Industry (CBI) has raised its growth forecasts for 2013 and 2014 and expects growth to gather pace in 2015 as the recovery continues to build.

Business investment and net trade are also expected to provide increasing support to growth over the coming years.

Unveiling its latest economic forecast, the business group is expecting GDP growth of 1.4% in 2013, up from 1.2% in its August forecast.

The prediction follows signs of a pick-up in confidence across a broad range of sectors, including services, construction and manufacturing.

However, quarter-on-quarter growth is expected to soften in the final quarter of 2013 (0.5%), in part reflecting some volatility in the trade and investment data.

In 2014 and 2015, the CBI expects the recovery to gather pace, forecasting 2.4% GDP growth in 2014 (up from 2.3% in August), rising to 2.6% growth in 2015, with domestic demand supported by increases in business and housing investment and household disposable income.

Quarter-on-quarter growth of 0.6% is expected in each quarter of 2014 as government spending begins to drag on GDP.

And while imports will continue to grow as the UK’s domestic situation improves, a return to growth in the Euro area, a broader global recovery and the resulting positive boost to exports should see a positive net trade contribution to growth in 2014 and 2015.