British economy grows 1% in 2013

The British economy will continue to grow by one percent in 2013 and will pick up more speed next year, according to the latest economic forecast released by the Confederation of British Industry (CBI) on Monday. Quarter-on-quarter growth is also expected to gather pace gradually this year, the CBI said. It forecast Britain's economic output to expande by 0.3 percent in the second quarter, 0.4 percent in the third and 0.4 percent in the final quarter of 2013. For 2014, the CBI is expecting growth of 2 percent, with quarter-on-quarter growth to range between 0.5 percent and 0.6 percent. "The UK economy is moving from flat to growth," said John Cridland, CBI Director-General, "Now the Government needs to pick up the baton and deliver on promises to get finance to firms, cut red tape and help drive up exports." But Cridland also warned that "although recent data suggests rising business confidence, the economic climate remains tough, hampering demand here and overseas. Meanwhile, consumers remain under pressure, as inflation continues to outstrip wage growth. Britain's unemployment will see a small rise in 2013 to 2.58 million before receding slightly to 2.51 million in 2014, said CBI. Inflation is expected to peak in the second quarter this year to 3.1 percent before starting to fall steadily for the rest of the year to stay at 2.5 percent though remaining above target throughout 2014. It said uncertainty in the eurozone and the muted international outlook is limiting business investment intentions this year. Business investment growth of just 3.3 percent is forecast this year, but is expected to pick up more significantly at 6.3 percent in 2014 as global conditions improve. The CBI noted that eurozone growth continued to have a negative influence on Britain's export prospects. Household spending is expected to remain subdued with wage growth weak and unemployment expected to rise slightly. However, improving confidence, lower inflation and improving credit conditions should support a gradual improvement in household consumption, with growth rising from 1.3 percent this year to 1.8 percent in 2014.