12 May 2014
CBI voices concerns over electioneering risk to UK growth
FXStreet (London) - The CBI today upgraded its forecast for GDP growth as the recovery continues to take hold. However the business lobbying organisation warned that short-termist electioneering ahead of next year’s general elections could affect investment appetite.
The CBI forecasts GDP growth of 3.0 percent in 2014, up from the previous forecast of 2.6 percent, and 2.7 percent in 2015, up from 2.5 percent.
The economy grew by 0.8 percent in the first quarter of 2014 and quarter-on-quarter GDP growth of 0.7 percent is expected for the rest of this year and next.
The CBI has taken a bearish view on sterling, forecasting that GBP/USD strength has troughed. However, it sees effects of a weakening currency on import prices as relatively benign.
CBI expects UK house price pickup
The CBI has voiced concerns over UK property prices, expecting to see a rise to 8.2 percent inflation this year (from 3.6 percent in 2013) and 5.1 percent next year. “Housing has come back under the spotlight as annual house price inflation figures have reached double digits on some measures,” says John Cridland, CBI Director-General. “While housing transactions are still running almost 30 percent below their last peak in 2006, they are picking up steadily.”
Concerns over electioneering threat to UK growth
Ahead of next year’s general elections, Katja Hall, CBI chief policy director, has warned of the risks of short-termist electioneering. “We’re a year away from the general election and politicians must stick with what’s working. That means the new government, of whatever colour, keeping the deficit reduction strategy on track. It must also tackle the UK’s economic challenges and not duck the tough decisions, such as reforming public services.
“Political positioning must not be allowed to stifle investment, whether it’s an unrealistic immigration target, unjustified interventions into specific markets, flirting with leaving the European Union, delaying vital long-term infrastructure projects or restricting labour market flexibility.”
The CBI forecasts GDP growth of 3.0 percent in 2014, up from the previous forecast of 2.6 percent, and 2.7 percent in 2015, up from 2.5 percent.
The economy grew by 0.8 percent in the first quarter of 2014 and quarter-on-quarter GDP growth of 0.7 percent is expected for the rest of this year and next.
The CBI has taken a bearish view on sterling, forecasting that GBP/USD strength has troughed. However, it sees effects of a weakening currency on import prices as relatively benign.
CBI expects UK house price pickup
The CBI has voiced concerns over UK property prices, expecting to see a rise to 8.2 percent inflation this year (from 3.6 percent in 2013) and 5.1 percent next year. “Housing has come back under the spotlight as annual house price inflation figures have reached double digits on some measures,” says John Cridland, CBI Director-General. “While housing transactions are still running almost 30 percent below their last peak in 2006, they are picking up steadily.”
Concerns over electioneering threat to UK growth
Ahead of next year’s general elections, Katja Hall, CBI chief policy director, has warned of the risks of short-termist electioneering. “We’re a year away from the general election and politicians must stick with what’s working. That means the new government, of whatever colour, keeping the deficit reduction strategy on track. It must also tackle the UK’s economic challenges and not duck the tough decisions, such as reforming public services.
“Political positioning must not be allowed to stifle investment, whether it’s an unrealistic immigration target, unjustified interventions into specific markets, flirting with leaving the European Union, delaying vital long-term infrastructure projects or restricting labour market flexibility.”