UK economy forecast return to pre-recession high by summer

Johnson Reed
2m read

It’s good news for the British public. The British Chambers of Commerce (BCC) lobby group has said that it believes the UK economy to return to the pre-recession peak by summer of this year. It claims that by April, the GDP will rise to the level of the start of 2008.

The BCC believes that the economic growth this year will be 2.8%, revised upwards by 0.1% from a previous estimate given. They also believe that the growth for 2015 will rise from 2.4% to 2.5%, and a growth in 2016 expected to be 2.5% also. The change is reported to be due to upward revisions to back data by the Office for National Statistics (ONS).

The BCC’s “Q1 – 2014” Economic Forecast report talks about these changes, and also explains how the 2008-09 UK recession was much deeper than most other G7 countries, and that the post-2009 recovery has not been as successful as other countries such as Germany and the United States. However they point out that the UK’s performance in 2013 has outshone those of other G7 countries.

The report also explains that the BCC expects the GDP growth to average 0.6% per quarter over the period to end-2016.

In something of a sobering remark, the report explains that had the UK’s GDP continued growing after 2007 and it’s current rate (essentially had the 2008 recession never happened), then the current GDP would be about 19 – 20% higher. However, this “output loss” is likely to be a permanent one.

In some good news for SMEs across the country, the BCC are expecting the manufacturing and construction industries to continue their positive growth over the next 3 years, though still not quite achieve pre-2008 records until at least 2017.

Another interesting fact from the report is that although the forecast of business investment shows growth over the next few years, its current rate is almost 20% below it’s pre-recession levels, despite government and BoE initiatives to improve lending to UK businesses. This continues to show why leasing finance from companies such as Johnson Reed continue to provide an essential service for businesses.

The BCC will also be holding their Annual Conference on 1st April, in the QEII Conference Center in London. The talk will focus on the key questions facing British businesses, and feature speakers such as Karren Brady of West Ham F.C., and MP Michael Gove, Secretary of State for Education.