THE UK economy will grow at an even faster rate in 2015 than had previously been expected, according to a leading private sector survey published this morning.
British growth slowed in the final three months of last year and had been expected to moderate further in 2015, yet low oil prices and a pick-up in real wages could see the UK economy expand by 2.7 per cent.
The Confederation of British Industry (CBI), which published the estimate, had previously expected 2.5 per cent growth.
Official data released this week by the Office for National Statistics (ONS) is likely to reveal that people’s pay packages climbed higher above the rate of inflation at the end of last year, meaning that Britons have more scope to splash their cash.
Economists estimate that pay in the final three months of 2014 was nearly two per cent higher than during the same period a year earlier. Inflation, meanwhile, is predicted to have fallen to a rate of just 0.3 per cent on the consumer price index for January, which is released by the ONS tomorrow.
Separate figures should also show a further improvement in the country’s jobs market, which has so far defied global economic worries.
“We expect claimant count unemployment to have fallen by 27,500 in January after a drop of 29,700 in December to stand at 840,200,” said Howard Archer of IHS Global Insight. “This would be the lowest level since June 2008.”
Yet the CBI warns that there could still be clouds on the horizon. Despite the recovery remaining strong, economic factors beyond these shores may make 2015 a difficult year.
“Businesses are looking on anxiously as insecurity continues to troll the Eurozone and instability remains elsewhere,” said CBI’s deputy head Katja Hall, while the group’s head of economics Rain Newton-Smith said: “Sterling’s recent high against the euro also adds to the challenges for manufacturing securing further export orders.”