The CBI predicted that GDP growth for the UK would average 0.6% this year, before growing 0.8% in 2024 and 1.6% in 2025.
In its latest economic forecasts published today (11 December), the body predicted GDP growth for the UK would average 0.6% this year, before growing 0.8% in 2024 and 1.6% in 2025. Meanwhile, the labour market will remain «relatively tight», it said, with unemployment peaking at 5% in mid-2025.
The CBI's forecast was slightly more optimistic than the Office for Budget Responsibility's, which last month forecast GDP growth of 0.7% in 2024 and 1.4% in 2025, while expecting unemployment to peak at 4.6%.
For the next two years, the CBI predicted the BoE's bank rate of 5.25% is expected to stay at its current level throughout the entire period, in contrast to expectations from the market that the Bank will begin cutting rates sometime next year.
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Inflation is expected to stay above 2% throughout 2024, ending the year at 2.5% before falling to the BoE's 2% target in the middle of 2025.
The CBI also found that sluggish GDP growth is expected to weigh on business investment, which is set to fall by 5% next year, while total capital spending is expected to decline 4.2% in 2024.
Globally, the group expects economic growth to remain «broadly constant», at about 3% per year. However, it forecast prospects to «diverge notably» across the globe, with US growth averaging at 1.4% and the Eurozone's at 0.7% next year, before converging in 2025 to 1.3% and 1.6%, respectively.
The poor growth in other developed nations is expected to temporarily depresses imports growth over 2024, leading to a small boost from net trade to GDP growth next year.
Despite this, UK exports are still
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