Rate hikes 'hit 2008 growth'
Britain's economy will only grow by 2.4 per cent in 2008, the Confederation of British Industry (CBI) has warned. Its latest quarterly economic forecast blames the prospect of another interest rate rise later this year on the dimmed expectations, despite the fact it predicts the Bank of England will reverse the hike by the end of 2007. This year's growth prediction remains unchanged at 2.8 per cent, with consumer spending reaching that pace from the CBI's 2.6 per cent forecast in March. Higher-than-expected inflationary pressures mean consumer price index (CPI) inflation will end the year at 2.2 per cent, only marginally above the two per cent target set by the Treasury. Unemployment will fall from 1.68 million in 2006 to 1.65 million in 2007 and is expected to fall to 1.6 million next year. The CBI has good news for the manufacturing sector, with strong international economic growth contributing to a positive balance of trade by 2008. Business investment will suffer, however, with growth falling to 3.7 per cent in 2008 from 5.9 per cent this year. CBI chief economic adviser Ian McCafferty said: "Recent oil price rises, unexpected and sharp increases in food costs, higher-than-expected import prices and businesses rebuilding profit margins after last year's squeeze have all added to inflationary pressures."Higher borrowing costs will make economic growth slightly weaker next year as consumer spending is reined in."
Share this..
Related stories
Barack Obama makes play for more power over US financial system
In a move which is as bold as it is surprising it has been revealed that representatives of the Barak Obama government are looking to introduce "new rules" into the regulatory environment of the US. Treasury Secretary, Timothy Geithner, appears to have recovered from his early mauling by Congress to lead Barack Obama's move to gain more power.
While there is some concern about the p...
financialAdvice.co.uk looks at 5 ways to Save in 2013
2012 was an unforgiving year for many. The economy failed to make any major bounds forward meaning businesses continued to struggle, and this was passed onto the consumer. For many people the idea of saving would have been ever-present, but the reality of being able to achieve any sort of sizable monthly contributions to the piggy bank, much further away. Now that we are in January and Chri...
Read MoreWill the UK economy really bounced back stronger?
Gordon Brown's suggestion that the UK economy will bounce back stronger than ever before has given some people hope in the UK but many are waiting for the proof behind the very upbeat forecast. The figures would suggest that the UK is currently weaker than it has been at any time in modern history and taxpayers and consumers are more concerned than ever before about the immediate outlook.
<...
Skills shortage 'solved by training'
Businesses should take responsibility for the UK's skills shortage by investing more in their employees, according to the Chartered Institute of Personnel and Development (CIPD). The human resources organisation believes line managers are key figures in making sure this development takes place.A survey released today by the CIPD shows that while 90 per cent of respondents think line managers have...
Read MoreIf the economy is improving why are banks not lending?
The UK economy at the moment is very much like a seesaw with a number of positive reports improving confidence yet a number of downbeat factors bringing many people back down to earth again. Even though a number of reports of late are suggesting a significant improvement in confidence across the board and a potential stabilisation of the UK economy we have yet to see any significant follow-through...
Read More