The Confederation of British Industry (CBI) has placed its confidence in the UK economic recovery by raising its growth forecasts for 2013 and 2014 respectively.
The UK’s leading business group unveiled its latest economic forecast on the eve of its flagship annual conference, predicting GDP growth of 1.4 per cent in 2013, up from its 1.2 per cent forecast in August.
It is felt the signs of a pick-up in confidence across a broad range of sectors, including services, construction and manufacturing led to better-than-expected GDP growth in Q3 2013.
In the coming years, the CBI expects the economic recovery to gather pace further, forecasting 2.4 per cent GDP growth in 2014, rising to 2.6 per cent growth in 2015, citing increases in business and housing investment and household disposable income.
This week, a poll released by Clydesdale and Yorkshire Banks found that almost all of the UK’s small and medium-sized enterprises (SMEs) plan to invest in growing their business in the 12 months ahead.
An increase in confidence means that 97 per cent of SMEs intend to invest in growth, according to the poll of 818 middle managers.
According to the survey, the average SME plans to invest 10 per cent of their turnover in increasing the size of their business.
John Cridland, director-general of the CBI, said: "The UK is now set fair for growth with confidence returning to Britain’s entrepreneurs.
"The recovery that started in the service sector has fanned out to manufacturing and construction, and is shaping up to be more broad-based.
"The recovery won’t be spectacular, just slow and steady, but appears more solid and better-rooted.
"We’re also expecting business investment to pick up over the next two years and beyond, and net trade will begin to make a stronger contribution to growth. By 2015, the CBI is forecasting growth of 2.6 per cent."
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