–2010 Growth Seen At 1.3%; Rising To 1.7% In 2011; 2.2% in 2012
LONDON (MNI) – The National Institute of Economic and Social
Research has raised its growth projections for the UK economy in
2010, but believes that the recovery will be slower than previously
estimated in 2011.
NIESR hiked its 2010 growth forecast to 1.3% from a previous
forecast of 1.0% but lowered its forecast for 2011 to 1.7% against
the 2.0% predicted in May. In 2012, NIESR sees growth at 2.2%.
NIESR’s latest forecasts show growth turning out weaker in 2011 and
2012 than those issued by the Office of Budget Responsibility, which
puts growth at 1.2% in 2011, rising to between 2.7% and 2.9% ‘in
the later years of the forecast’ .
The Bank of England’s implied forecast in its February Inflation
Report was for 3%-4% growth in 2011. In its latest World Economic
Outlook the IMF forecast UK growth would be 2.1% in 2011 and 1.9% in
2012.
NIESR expects inflation to fall back from this year’s highs. NIESR
predicts CPI will average 3.0% in 2010 before dropping to 2.7% in 2011.
The institute predicts CPI will then fall to 1.4% in 2012
NIESR said that the coalition government’s more aggressive fiscal
consolidation programme will result in public sector net borrowing
falling more sharply than in its previous forecast. The institute
forecasts net borrowing will drop from stg153 billion (10.9% of GDP) in
fiscal year 2009-10 to stg51.3 billion (2.8% of GDP) by 2015-16.
–London newsroom: 4420 7862 7492; email: ukeditorial@marketnews.com
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