The UK economy will exceed its pre-recession peak this summer, according to the latest predictions from British businesses, despite warnings that the recovery is on shaky foundations as a booming housing market stokes consumer confidence .
The British Chambers of Commerce had forecast that GDP would overtake its performance in the first quarter of this year in the autumn, but has now brought that forward to the second quarter. Services and manufacturing have been the main drivers of growth according to official data, but the BCC warned that the buoyant outlook concealed long-term challenges.
“We urge the chancellor to use this month’s budget wisely by incentivising businesses to hire young people so that the next generation of workers are not left behind,” said John Longworth, the director general of the BCC, which represents more than 100,000 businesses. According to the BCC, UK GDP – excluding the impact of inflation – will reach £392.8bn in the three months to July, a level not attained since the economy generated £392.7bn at the beginning of 2008.
It now expects GDP to grow 2.8% this year, compared with its forecast of 2.7%. But that is still below the Bank of England’s growth forecast of 3.4% this year. The business group predicted wage growth would overtake inflation in the middle of this year, meaning workers will finally see growth in their real earnings.
via The Guardian
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