UK GDP forecasts round-up June 2013: ‘All cylinders now firing’ for return to economic growth?

Jets_engines_trucksWe present XpertHR’s latest monthly round-up of forecasts for UK economic growth (as measured by growth in gross domestic product (GDP)) from leading economic commentators.

The UK economy has returned to growth in 2013. But the underlying picture is one of protracted economic stagnation rather than recovery, XpertHR’s latest monthly economic commentary finds.

So how likely is it that the current return to growth will be sustained?

UK avoids triple-dip recession with 0.3% GDP growth in Q1 2013
Gross domestic product (GDP) grew by 0.3% during the first quarter of 2013, according to latest ONS estimates.

This means that the UK economy has successfully avoided an unprecedented triple-dip recession. Indeed, data released later this week could well show that the UK economy did not even suffer a double-dip recession in 2012.

UK economy to grow by 0.5% in Q2 2013, says Bank of England
So will the return to growth be sustained in Q2 2013?

The ONS releases its preliminary estimate of GDP growth in the second quarter or 2013 next month (on Thursday 25 July 2013).

Some commentators believe that growth will pick up further in the GDP figures for Q2 2013:

  • The Bank of England expects growth of 0.5% in Q2 2013, presaging “a modest and sustained recovery over the next three years,” XpertHR reports.
  • ING economist James Knightley says: “[W]e should be looking for a positive GDP figure in the region of 0.4 to 0.5% quarter-on-quarter for the second quarter of 2013.”
  • Markit reports that latest “data suggest that economic growth will have picked up in the second quarter compared to the 0.3% increase in GDP seen in the first quarter, shaping up to reach 0.5% if June sees sustained growth.”

XpertHR UK GDP forecasts round-up June 2013: ‘All cylinders now firing’?
Here is XpertHR’s latest monthly round-up of GDP forecasts for 2013 and 2014:

  • Institute of Chartered Accountants in England and Wales (ICAEW):  “The improving business outlook means ICAEW’s central forecast is for the economy to grow by 1.2% this year, up from its Q1 forecast of 1.0% growth. Under this forecast, the UK economy will see its strongest pace of expansion since 2010. However, GDP would still be 0.8% below its 2007 peak level, though it is highly likely that this peak will be exceeded in 2014 if the economic recovery continues at a reasonable pace.”
  • IHS Global Insight:  “We have modestly upgraded our GDP growth forecasts for 2013 to 1.0% (from 0.9%) and 2014 to 1.6% (from 1.4%).”
  • Markit says “there’s good reason to believe growth can accelerate further.”  It says: “The UK economy has moved up a gear with all cylinders now firing. For the first time in a year, manufacturing, services and construction sectors are now all reporting higher levels of activity. The resulting overall pace of growth in May was the fastest since March of last year, having now accelerated for three successive months.”
  • OECD: UK GDP growth to average 0.8% in 2013 and 1.5% in 2014.

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