July 12, 2013
The International Monetary Fund (IMF) has raised its forecast for growth in the UK this week. In an update of its World Economic Outlook it said that it expected the UK's economy to expand by 0.9% this year, up from its April forecast of 0.6% – but still just short of the 1% growth it predicted at the start of 2013.
The Treasury said: "The IMF has confirmed that the UK economy is moving from rescue to recovery, revising up its growth forecast for this year. But the IMF again warns of the continued risks to the global economy, showing that the recovery cannot be taken for granted."
Meanwhile, lower than expected manufacturing figures also released this week show that manufacturers are producing almost 3% less than they did a year ago.
David Kern, chief economist at the British Chambers of Commerce (BCC), said: "Most analysts were expecting small increases in both manufacturing and production in May. While we shouldn't be too negative about these trends, it is clear that scope for expansion in the manufacturing sector will be limited in the near-term, and the economy will have to continue to rely on a strong service sector."
Despite the continued uncertainty, members of the Institute of Directors (IoD) say the immediate future is bright, according to the latest IoD survey of over 1,000 business leaders. It found that 62% think that the outlook for the UK economy is now brighter than at any stage since the financial crisis of 2008.
However, IoD members' confidence does not extend into 2014, when 39% of members expect the economy to grow less than the 1.8% forecast by the Office for Budget Responsibility. In fact, the poll shows that IoD members continue to have greater confidence in the outlook for their own organisations than for the economy as a whole.