Saturday 24 February 2018

Economists predict UK set for fastest growth since crash

Fergal O'Brien and  Joshua Robinson

ECONOMISTS have upgraded their forecasts for UK economic growth, predicting that Britain's economy is heading for its fastest expansion since the onset of the financial crisis.

Gross domestic product will rise 1.3pc this year and 2pc in 2014, compared with predictions of 1pc and 1.7pc previously, according to average analyst estimates.

For Bank of England Governor Mark Carney, the question now is how quickly this recovery can lower the country's unemployment rate after he introduced forward guidance last month and linked the jobless rate directly to this policy stance.

Under forward guidance, the nine-member Monetary Policy Committee has said it won't consider raising the benchmark interest rate from a record-low 0.5pc until unemployment falls to 7pc, which they don't see happening until late 2016.

But that projection is being challenged by recent data, which showed the unemployment rate fell to 7.7pc in the three months through July from 7.8pc in the second quarter.

Irish Independent

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