CBI tips UK recovery
Economic growth will gather pace in the second half of this year, making it unlikely the Bank of England will give the economy another cash injection, a leading business lobby said.
Quarter-on-quarter GDP growth will accelerate from 0.2 per cent in the first two quarters of this year to 0.6 per cent and 0.5 per cent in the last two, the CBI estimated.
“With the economy on a slightly firmer footing but with inflation well under control, we do not anticipate further quantitative easing beyond that which was announced by the Bank of England (on Thursday),” said Ian McCafferty, CBI’s chief economic adviser, at a presentation of the CBI’s forecasts.
The central bank said last week it would pump another £50bn into the economy under its quantitative easing (QE) programme, to bolster a renascent recovery and deflect any fallout from the debt crisis in the euro zone, Britain’s biggest trading partner.
Consumer price inflation has fallen from a three-year peak of 5.2 per cent in September to 4.2 per cent in December, and policymakers have voiced confidence that it will dip below two per cent later this year.
The CBI predicted that inflation would fall to 2.2 per cent in the final three months of this year and stay close to two per cent throughout 2013.