Industry casts doubts over rebalancing

THE CONFEDERATION of British Industry (CBI) today raised its forecasts for growth, alongside a warning that investment and trade are not picking up quickly enough.

The industry body now expects economic growth of 1.2 per cent this year, followed by 2.3 per cent in 2014, but raised concerns about the way in which consumption was driving the current expansion.

Drawing attention to higher household spending, the group said any increase based on a fall in saving was likely to be temporary. The CBI’s John Cridland commented: “It’s still early days. We need to see a full-blown rebalancing of our economy, with stronger business investment and trade before we can call a sustainable recovery.”

The CBI also believes that inflation will stay between 2.5 and three per cent this year, and remain above target next year.