One of the U.K.’s top business lobby groups has upped its growth forecast for the British economy in 2014, but warned that political uncertainty remained a “major risk” to the country’s recovery.
Encouraging signs that the recovery is becoming more broad-based led the Confederation of British Industry (CBI) to raise its 2014 and 2015 growth estimates for the U.K. on Monday. It now expects the U.K. economy to expand by 3 percent this year and by 2.7 percent in 2015, up from previous expectations of 2.6 percent and 2.5 percent respectively. The group also said it expected interest rates to start rising in the first quarter of 2015.
In the first quarter of this year, Britain posted GDP growth of 0.8 percent quarter-on-quarter, marking the fifth consecutive quarter of expansion.
“The recovery is advancing after a strong performance in the first quarter of 2014. Prospects are bright and we expect the recovery to broaden out this year, with greater support from business investment in particular,” John Cridland, director-general of the CBI, said in a statement.
It comes after the National Institute of Economic and Social Research (NIESR) said on Friday that the U.K.’s economic output would top its pre-crisis peak in the second quarter of this year. It also upped its growth forecasts for the U.K. economy for this year and next.
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