The forecast for export growth fell from 1.9 per cent to 0.8 per cent for 2014, and 4.2 per cent to 4.1 per cent for 2015, according to research today from the British Chambers of Commerce (BCC). A spokesperson for the BCC said: “We are forecasting this trend won’t continue and annual export growth will rise back to a more normalised level of around 4.1 per cent [in 2015]. “This forecast is consistent with world trade predictions.” The BCC also updated its GDP Q2 growth figures for the next years. In 2014, from 3.1 per cent to 3.2 per cent, and in 2015 from 2.7 per cent to 2.8 per cent in 2015. 2014 looks set to be the first year since 2007 that economic growth will have exceeded 3 per cent. The modest increases from the Q2 report are generated by stronger labour markets and upgraded ONS estimates for year-on-year GDP growth. A growth slowdown in 2015 is likely to be caused by decreasing household consumption growth – to 2.2 per cent by 2016 – and less public spending. BCC director general John Longworth said reliance on consumer spending as a driver of growth can not continue. Youth employment will drop to 13.8 per cent by 2017 – a net fall of 130,000. Total UK employment should fall from 2.077m to 1.657m. Interest rates in the UK are expected to go up to 0.75 per cent in 2014; then 1.25 per cent in Q4 2015 and 2.25 per cent in Q4 2016. Longworth said: “The task at hand is to ensure that the stellar 2014 growth is not a flash in the pan. “We [need] ministers unblocking infrastructure projects and improving access to finance so firms across the UK can invest, create jobs and export. “Businesses up and down the country should be congratulated for their hard work and determination in driving the UK recovery despite a number of international and domestic challenges.” Image source
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