The British Chambers of Commerce (BCC) has predicted the UK economy will grow quicker than expected this year and in 2015.
New figures from the BCC suggest the UK economy could grow by 3.2 per cent in 2014, well above the 2.7 per cent forecast by the Office for Budget Responsibility.
The BCC believes a stronger labour market and higher-than-expected growth for the second half of the year were two reasons for the upgraded prediction.
However, the group warned that the UK’s long-term growth may be affected by weakened export levels. The lobby group revised its UK exports growth forecast down from 1.9 per cent to 0.8 per cent.
The forecast is less optimistic than an estimate made by the Bank of England earlier this month, which predicted export growth of 2.25 per cent this year.
BCC director general, John Longworth called on firms to do more to build on the recent economic upturn.
“We must ensure the stellar growth in 2014 is not a flash in the pan. We need to invest and export more, innovate, and build,” said Longworth.
The BCC also revised its estimate for economic growth in 2015, up from 2.7 per cent to 2.8 per cent, due to strong employment figures.
“It is disappointing that we have downgraded export growth for the next two years as a strong international trade performance is key if we are to steer away from a reliance on consumer spending,” added Longworth.
In a separate report, the Confederation of British Industry (CBI) found that levels of optimism amongst UK retailers are at its highest this month since May 2002.
The business lobby group’s new Distributive Trades Survey said sales grew strongly in August, with more than half (51 per cent) of respondents seeing trade rise from a year earlier, while 14 per cent recorded a fall in sales.
Sales volumes grew strongly among grocers, chemists, and furniture and carpet retailers, while the CBI said specialist food and drink stores experienced a fall in sales.
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