Business growth in the UK is expected to slow in the coming months, according to a new survey by the Confederation of British Industry (CBI).
Leading UK business groups forecast a three per cent growth for the remaining months of 2014 leading to a 2.7 per cent rise in 2015. The figure was unchanged from the estimates published by the CBI in May. The UK has enjoyed the fastest rate of growth among G7 nations recording a 0.7 per cent increase between the first quarter of 2013 and the second quarter of 2014.
Both business and consumer confidence have been increasing over recent months and thanks to improving credit conditions there has been a drop in uncertainty over demand. Following a period of sustained growth, the CBI expects this acceleration to level off in the second half of 2014 with quarter three and quarter four expecting a steady 0.7 per cent and 0.6 per cent rise respectively.
However, the CBI noted a continued weakness of productivity while wage growth also failed to pick up. The organisation did state that it was expecting this to change in 2015 with an expected one per cent rise in wages next year followed by a 2.4 per cent increase in 2016.
John Cridland, CBI director-general, said: "The UK’s recovery is on solid ground, with our quarterly growth on average outstripping G7 competitors over the last year. For the rest of this year, we expect growth to get onto a more even keel and the recovery to become further entrenched next year.
"Business investment has been growing better than expected so far this year, but it still has a lot of catching up to do to get back to its pre-crisis level."
The CBI's latest forecast comes after the Office for National Statistics revised the gross domestic product (GDP) for the UK. It showed that the nation's economy was recovering quicker than first though with growth improving by 0.1 percentage points a year between 1997 and 2012.
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