British Chamber of Commerce upgrades UK Growth forecast

The British Chamber of Commerce (BCC) has upgraded their forecast of growth in the British economy over the next two years as you can read at

http://www.britishchambers.org.uk/press-office/press-releases/bcc-upgrades-uk-growth-forecast-but-warns-on-longer-term-outlook.html

However, they rightly warn that we cannot afford complacency.

The BCC's latest forecast of UK growth in GDP has increased from 2.6% to 2.7% for 2015, and from 2.4% to 2.6% in 2016.

This is due to stronger than expected growth in household consumption and services. The latest forecast also makes the BCC’s first prediction for UK growth in 2017 - at 2.6%.

While welcoming the upgrade, the BCC's Director General, John Longworth pointed out that consumer spending is a key driver for the BCC’s expected growth figures. Consumption is a fickle friend of the economy, and long-term, sustainable growth depends on boosting the contribution of business investment and exports.

On those issues the BCC's Quarter One economic forecast projects that

  • UK business investment is expected to grow by 3.5% in 2015, compared to 6.8% in 2014. This is largely due to two consecutive quarterly declines in Q3 and Q4 2014. However, business investment is expected to grow by 7.2% in 2016 and 7.4% in 2017.

  • Exports are expected to increase by 3.7% in 2015, and 2.6% in 2016 and 2017. The 2015 export forecast has been upgraded since the last quarter – when we predicted 1.9% in 2015 - due to a sharp increase in exports in Q4 2014.

    • Clearly however, this expected progress could be put at risk if a UK government were to be elected in May which followed policies hostile to British business. The recovery is not yet secure and if people hostile to those who create jobs and wealth were elected, the consequences could easily be a return to recession and far greater hardship.

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