UK economy in good health, business lobby groups say

Brompton bicycle factory, London Much of the UK economy is growing, according to the CBI and BCC

The UK economy is in good health according to two major business lobby groups, the CBI and the British Chambers of Commerce (BCC).

The CBI says growth reached a record high in May, marking the best reading since it began gathering data in 2003.

Meanwhile, the BCC upgraded its growth forecast for 2014 from 2.8% to 3.1%, which, if achieved, would be the highest rate since pre-crisis 2007.

That figure is well above the 2.7% forecast by the OBR.

The OBR, or Office for Budget Responsibility, is the government's independent fiscal watchdog.

Start Quote

Make no mistake - we still have a lot of work to do”

End Quote John Longworth BCC
Strength across the board

Latest official figures showed that the UK economy grew by 0.8% in the first three months of 2014.

The CBI's growth report suggests the UK economy has continued to perform strongly in the second quarter of this year.

Stronger economic performance was seen across the board, it said.

Sectors including retail sales and professional and consumer services did well in the three months to May, while manufacturing output continued to grow at a "solid pace".

Andrew Graham, the chief executive of wallpaper manufacturer Graham & Brown, told the BBC he was cautiously confident: "The economy is improving, but that is from a very low base.

"I think we are just starting to see recovery. As a business, we have starting investing seriously again over the last 12 months."

UK still 'exposed'

CBI deputy director-general Katja Hall said the improvement was down to increased confidence in the UK economy, easier access to credit, and better global economic conditions.

However, Ms Hall said there were risks to the UK's outlook from global developments, including the "possibility that the situation in Ukraine and Russia could impact on global commodity prices".

She added: "With the eurozone crisis still far from being fully resolved, the UK continues to be exposed to a prolonged period of subdued activity in the region."

The BCC also said the economic recovery was not guaranteed.

John Longworth, the BCC's director general, said: "Our forecast confirms that Britain is leading, rather than following, other major economies when it comes to short-term growth, which is great news.

"But make no mistake - we still have a lot of work to do."

He added that the UK was "overly reliant on consumer spending" as a driver of growth.

More on This Story

Related Stories

The BBC is not responsible for the content of external Internet sites

More Business stories

RSS

BBC Business Live

  1.  
    QANTAS 06:12:
    A Qantas Airline plane gets takes off at Sydney Airport in Sydney on August 28, 2014

    Overnight Australia's national airliner Qantas reported a huge loss of A$2.8bn for the past year - its biggest ever. That was partly due to writing down the value of its planes by A$2.6bn. Qantas added weak domestic demand, poor consumer spending and rising fuel costs also contributed. Chief executive Alan Joyce tried to put some gloss on the figures: "There is no doubt today's numbers are confronting... but they represent the year that is past".

     
  2.  
    SCOTTISH INDEPENDENCE 06:03:
    Saltire

    Pro-independence business people in Scotland have hit back. 200 of them have signed a letter, appearing in the Herald online, saying that the business case for independence "has been made - and it's strong and ambitious". They add: "The real threat to Scotland is the real possibility of a British exit from the European common market".

     
  3.  
    Rebecca Marston Business reporter, BBC News

    The monitor has been fitted and off we go. You can plug in to us bizlive@bbc.co.uk or @bbcbusiness. Here until 13:00.

     
  4.  
    06:00: Ian Pollock Business reporter, BBC News

    Good morning, the Business Live page will have its finger on the business pulse, just for you.

     

Features

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.