LONDON: The Confederation of British Industry (CBI) has cut its economic growth forecasts for the country for 2015 and 2016. The business lobby now expects Britain’s GDP to grow by 2.4% this year (a decrease of 0.2% from previous forecast of 2.6%) and 2.6% in 2016 (again a decrease of 0.2% from previous 2.8%)
The reduction reflects weaker investment growth in the UK and a dull global outlook which is expected to affect the trade. The scaling down of the growth rate has also come after Q3 figures revealing weaker than expected growth of 0.5%. Strengthening of pound has made the import from Britain more expensive for overseas firms, which has ultimately hampered manufacturing in the country. Slowdown in China and other emerging markets has also weakened the economic growth.
CBI has also warned that US interest rate hike could also have an impact on British exports.
John Cridland, CBI director-general, suggests the continued strong performance of the British economy clearly indicates its resilience despite turbulent times overseas. Cridland has urged government to expand airport capacity and allow firms to continue recruiting skilled professionals from overseas.
“Manufacturers are enduring tougher conditions as a persistently strong pound is hamstringing our export competitiveness.” said CBI director-general John Cridland.
“But our domestic story is strong and overall we are now in a phase of stable but solid economic growth.”
According to figures released by Visa Europe on Monday, consumer spending last month increased by 2.1% on the year in real terms.
Looking forward, overall spending looks set to reach higher levels this month, as both online and store-based retailers are preparing to lure customers in with bigger and better Black Friday deals.” said Kevin Jenkins, Visa managing director.
