Member Article

UK economy could grow in second half year

The Ernst & Young Item Club announced in the latest quarterly forecast that the UK economy could return to growth in the second half of the year due to the falling inflation and increasing consumer spending.

It is expected that the UK economy will grow by 1.6% in 2013 and 2.6% in 2014, but the overall growth in 2012 will remain flat.

The inflation rate could fall to 1.7% by the end of the year. Peter Spencer, chief economic adviser at the Ernst & Young Item Club, said: “Inflation is now coming back to heel, helped by the chancellor’s decision to postpone the increase in fuel duty, falling energy and commodity prices, plus tax changes dropping out of the calculation.”

The real disposable incomes could increase by 0.4% in 2012, and by 1.5% in 2013.

It is also expected that business spending will grow by 3.4% in 2012, but take time to return to pre-recession levels by 2015.

Peter Spencer pointed out that it will take time to rebuild “confidence in financial and business communities” to recover the UK economy.

This was posted in Bdaily's Members' News section by Yu-Chih Lin .