Ernst and Young Forecasts UK to return to growth in H2

The UK’s economy will rebound in the second half of the year, the Ernst and Young Item Club’s latest report says.

However, its quarterly forecast, which is produced using the same model as the UK Treasury, still predicts that the economy will contract by 0.2% over the year as a whole.

The Item Club report says that the country’s trade performance has been deeply disappointing.

This has offset the positive effects of lower inflation and rising employment.

The forecast is more optimistic than the International Monetary Fund’s assessment released last week, which predicted that the UK economy would shrink by 0.4% this year.

The Item Club says economic growth will be 1.2% next year and 2.4% in 2014 and 2015, fuelled by higher consumer spending as a result of falling inflation and a better jobs market.

via BBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza