The U.K. economy is forecast to grow 2.6% this year, supported by an unemployment rate of 7% or below throughout the whole 12 months and an increase in business investment, the Confederation of British Industry said Tuesday.
The business group’s economic expectations are broadly in line with the latest estimate from a range of forecasters. The CBI also said that growth is moving toward a sustainable path and isn’t based on debt growth but rising employment and earnings and business investment.
The forecasts show a modest upward revision to gross domestic product growth expectations in 2014 from 2.4% in its previous forecast, while unemployment is also more positive. Another key change is real earnings, with consumer price inflation now expected to rise at an average pace of 1.9% in 2014—compared with the previous forecast of 2.5%—earnings growth should surpass inflation sometime in the second quarter of this year.