NIESR forecasters expect slow growth in the third quarter
Forecasters at the National Institute of Economic and Social Research (NIESR) have lowered their previous growth estimate for the British economy, which they now expect to slow in the third quarter.
NIESR said the economy would grow by 0.4 percent in the three months to September, down from a forecast of 0.8 percent they made in May. The current forecast is that:
- The UK economy will grow by 2.5 per cent this year, and will remain close to this rate throughout the forecast period.
- The recent increase in unemployment rate will be reversed in coming quarters.
- CPI inflation will remain below target until the end of 2017.
- The Bank of England will begin to raise rates in early 2016.
- The key domestic unknown over the next few years remains the future path of productivity growth.
According to NIESR, the biggest domestic risk to the UK economy is the absence of meaningful productivity growth. Until this returns, ‘significant improvements in standards of living should not be expected’.
The rate of inflation is expected to remain around zero for the rest of this year. NIESR say that the absence of a rebound in oil prices, as well as the appreciation of sterling against a basket of currencies, weighs on their forecast for consumer price growth in the near term.
But overall, their outlook is fairly positive with the factors expected to be temporary:
“By 2017 we expect inflation to be more consistent with the Bank of England’s mandated target of 2 per cent per annum.”
Ruby Stockham is a staff writer at Left Foot Forward.
8 Responses to “Experts warn that poor productivity is threatening UK growth”
GhostofJimMorisson
And yet the Greens and (I presume) Corbyn would massively increase public sector jobs, paid for by….answers on a postcard.
stevep
Paid for by us, for our benefit….. Not paid for by us so private profit can be made.
Social Democracy is needed, Capitalism only works for the few, not the many.
GhostofJimMorisson
Spare me the platitudes, Steveo, they didn’t work for Ed, they don’t work for you. The point I was making is that our low-skilled, low productivity economy cannot sustain a bloated, expensive public sector indefinitely. We need a productive economy to sustain an effective public sector. You can’t have one without the other. Corbyn and Caroline Lucas bang on about the banking sector and the City; yet without them and the revenue they generate we could not sustain our public service, let alone pay for the plethora of infrastructure projects Corbyn as in mind.
stevep
Not a platitude, Jimbo, but a heartfelt belief based on experience.
Governments can create economies to suit any flavour. At the moment it is Capitalism.
Corbyn and Lucas understand this full well and would seek to create an economy that benefits the many, rather than the few, not to mention the environment we all live in.
Properly regulated,the Banking and financial sectors would be our servants, not our masters.
GhostofJimMorisson
Proper progressive taxation would generate the revenue needed.
You mean a return to squeezing the rich ’till the pips squeak’? Those days are gladly long gone. Corbyn and Lucas constantly berate the rich, denouncing them at every opportunity yet would happily take/steal their money to fund their vanity projects (such as the Green’s preposterous Citizens Allowance scheme, which Andrew Neill exposed for the almighty guff it was during that car crash interview with Natalie Bennett) Increase taxes to 1960s/70s levels and you deincentivise wealth creation. No bastard way would I kill myself trying to make my fortune to then have it stolen by Lefties who despise me for being wealthy.