-Katja Hall, CBI deputy director-general
The Confederation of British Industry has revised upwards its UK growth outlook for this year in light of low inflation and falling unemployment figures. The CBI now predicts the British economy to grow by 2.7% in 2015, compared with its November forecast of 2.5%. GDP is estimated to increase 0.7% during each quarter of this year, and then rise by 2.6% in 2016. The organisation said growth will be underpinned by low inflation, which currently stands at 0.5%, low oil prices, robust household spending, as well as falling unemployment. The UK economy will also benefit from low interest rates as it is now unlikely that rates will be lifted this year and may even be cut further. However, political instability due to the UK election in May and crises in Greece and Ukraine could negatively effect on trade, thereby hitting businesses. Also, property website Rightmove said the average asking price of houses put on the market advanced by 2.1% in the four weeks to February 7, picking up momentum from a month earlier.
The UK's GDP slowed to 0.5% in the fourth quarter of 2014, from 0.7% in the previous three months, according to the first official estimate. In its February Inflation Report forecast, the BoE said it predicted growth in the fourth quarter of 2014 to be 0.6% after the final estimate. The BoE is upbeat on growth, as it kept 2015 annual GDP unchanged at 2.9%, but upwardly revised 2016 growth to 2.9%, from the 2.6% estimated in its November forecast.
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