British Chambers of Commerce: Inflation report should help to reassure UK business
- Bank of England (BoE) predict GDP growth of 2.7% in 2015, 2.5% in 2016 and 2.6% in 2017
- BoE predicts inflation at 0.1% in Q4 2015, 1.2% Q4 2016 and 2.0% in Q4 2017
- Average earnings growth is forecast at 2.5% in Q4 2015, 3.75% in Q4 2016 and 4.0% in Q4 2017
Commenting on the inflation report and related information published today by the Bank of England, David Kern, Chief Economist at the British Chambers of Commerce (BCC) said:
“Although the growth forecasts are now lower for this year and next they still signal a relatively solid pace of expansion for the UK economy.
“Significantly, the Bank of England has downgraded its inflation forecast and taken together with a lower forecast for average earnings this suggests that the first increase in interest rates is unlikely to occur until Q3 2016. This is good news for UK businesses as it helps provide stability for them to plan and invest.
“The Bank of England rightly highlights the growing international risks facing the UK. While it is disappointing that they now predict lower growth in exports, this is in line with our own recent forecast and surveys.
“These latest predictions indicate that the economy is growing at a reasonable pace but for it to rise further the focus now must be on nourishing growth and rebalancing towards net exports.”