In 2013 the UK economy is predicted to grow modestly, despite ongoing instability in the Eurozone – according to the Confederation of British Industry (CBI) and their analysis of the figures. The CBI forecasts that there will be GDP growth of 1% in 2013, and while this is slightly below the previous forecast of 1.4%, it’ will still represent growth for many types of business.
This lower than expected growth figure has come about due to the weaker than predicted growth in the fourth quarter of 2012, of -0.3%, which stoked fears of a triple dip recession. Quarter on quarter growth is expected to be marginally positive all the way through the year, starting at 0.3% in the first quarter and then staying within the 0.3-0.4% range for the rest of the year.
2014 is looking brighter, with growth forecasts of 2%, unchanged from the CBI’s previous estimates in November. However, as we’ve seen with 2013 forecasts, these figures are obviously affected by the year preceding it. Again, quarter on quarter growth for 2014 is stronger but still modest, remaining in the 0.5-0.6% range.
The CBI Director-General John Cridland says that the UK is beginning to return to normal organic growth. This is being stimulated by companies offering the right products in the right markets and experiencing business growth as a result. He continues;
‘Recent business surveys also give grounds for cautious optimism about our forward prospects. Looking ahead, external risks to the outlook in the Eurozone and further afield are likely to keep growth at home and abroad in check.’
‘The potential for Eurozone tensions to flare up again, coupled with tough conditions in the domestic market, explain why business confidence remains patchy. After the uncertainties of 2012, the fear of external storm cloud lingers.’
While both large and small businesses will be paying close attention to what happens in the Eurozone, that’s not to say that there isn’t some optimism for the coming months and years within the UK business sector.