Optimism grows for recession's end in July

A report published today claims that the longest downturn for at least a century will end this summer as the UK economy finally recovers the ground lost in the recession.

More than six years after crisis struck, the report by the British Chambers of Commerce has predicted that UK gross domestic product will return to it’s pre-recession high by the end of the second quarter of 2014.

GDP currently stands at 1.4 per cent below its pre-recession peak having dropped by 7.2 per cent in 2008 and early 2009. 

The report will be welcome news to the Chancellor George Osborne who is due to present on the state of the economy next week.

A separate report by accountancy firm BDO also predicts the milestone will be reached in July. Peter Hemington, a partner at BDO said;

‘On its current trajectory, we expect UK economic output to surpass the level last reached before the onset of the financial crisis by July this year, which will be a great relief to the Chancellor as we near the Budget.  What’s more, the recovery has well and truly taken hold across all sectors, with manufacturing in particular driving strong job creation.’ 

The BCC now believes the economy will grow by 2.8 per cent this year and 2.5 per cent in 2015 – up from its previous predictions of 2.7 per cent and 2.4 per cent.

It expects growth of 0.7 per cent in the first quarter followed by 0.6 per cent between April and June before averaging 0.6 per cent per quarter until the end of 2016.

The group sees unemployment falling from the current level of 7.2 per cent to 6 per cent at the end of 2016. But youth unemployment among 16-to-24-year-olds is only expected to drop from 19.9 per cent to 17.8 per cent.

‘Our economic recovery is gaining momentum,’ says BCC director general John Longworth. 

‘Businesses across the UK are expanding and creating jobs, and our increasingly sunny predictions for growth are a testament to their drive and ambition.  But it’s not time to break out the champagne glasses just yet. Major issues remain, such as the unacceptably high level of youth unemployment. We urge the Chancellor to use this month’s Budget wisely by incentivising businesses to hire young people so that the next generation of workers is not left behind.’ 


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