THE UK economy grew at a solid pace in the first three months of 2015, according to a survey of firms.
Firms also expect growth to strengthen over the next three months, led by business, professional services and manufacturing, the figures released today by the Confederation of British Industry (CBI) show.
It comes ahead of a closely watched survey of service sector firms – that make up 79 per cent of the economy – that will be published this morning by financial information firm Markit, indicating how quickly the sector expanded in March. Economic growth in 2014 was recently revised up to 2.8 per cent, confirming that the UK was the fastest growing economy in the G7 group of nations last year.
The percentage of firms that saw output rise over the past three months minus the percentage of firms that said output had declined was 18 per cent, down slightly from 19 per cent in the three months to February. Meanwhile, the percentage of firms that anticipated greater output over the next three months minus those that believed output would decline climbed to 25 per cent. It marks a rise on the 18 per cent in last month’s survey.
“The outlook for 2015 looks encouraging. Our surveys show it’s been a solid start to the year with the prospect of stronger growth to come. The benefits of lower oil prices should be increasingly felt; with cheaper petrol boosting households’ incomes and spending power, and cutting costs for many businesses,” said Katja Hall, deputy director general of the CBI.
“The main risk to the UK economy comes from the Eurozone, with continuing wrangling over Greece’s bailout package stoking uncertainty. Plus, many businesses will also have to contend with a stronger pound weighing down on already weak export growth.” A stronger pound makes UK-produced goods more expensive to foreigners, reducing the global competitiveness of exporters.