Good news for UK economy

15 July 2013 10:00 - Mark Maffia

    



Good news for UK economy

 

The U. K economy seems to be back on track. This was revealed after the Ernst & Young Item Club published its latest forecast.   It predicted a growth for Britain's economy of 1.1 percent for this year. This is almost double the forecast they published three months ago, which predicted 0 .6 percent at the time.   Consumer spending and the housing market, it says, would help towards growth this year. It also predicts that exports and business investment would pick up in 2014.


Housing Market

The housing market is supported by the government scheme Help to Buy, which has helped to lower mortgage rates.

Higher consumer spending is not the result of higher income though, but consumers are more likely to use their savings. However, although everything is looking much more positive, a rebalancing of the UK economy is not expected before next year.  


Slow down still possible

Also, says Peter Spencer, chief economic adviser of the Item Club, there still are risks which could slow down the pace of growth.   Predictions of other organizations, however, also show expectations of recovery for Britain's economy.  Small businesses, although still careful about investing, are expecting higher profits in the next six months.


Less middle income jobs

Warning came from the Trades Union Congress, which points out that four out of every five jobs which have been created since summer 2010 are in low-paid industries, like for example residential care or retail.   Highly paid jobs are also on the rise.   Frances O’Grady, general secretary of the TUC, says that many people have to take low-paid, low-skill jobs after having been made redundant from middle–income jobs.  This, she says, is one of the unreported struggles of recent years.

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