Economic growth to return by end of year

The UK economy will return to growth towards the end of the year, the CBI’s latest quarterly economic forecast has suggested, with increased growth in 2013.

An improvement in GDP growth is expected late in 2012 as the country sees a bounce-back from the slowdown experienced during the Diamond Jubilee together with further decreases in inflation. Quarter-on-quarter growth is predicted to rise to +0.6% in Q3 of this year, followed by +0.2 in the final three months of the year.

2013 is forecast to see overall GDP growth of +1.2%, down on the previous forecast of 2% due to ongoing global economic uncertainty.

The CBI’s Head of Economic Analysis, Anna Leach, indicated that economic conditions are likely to prove more healthy in 2013: “We expect the pressure on household incomes to continue to lift through the remainder of this year, as inflation falls further, and this should put the recovery on a slightly firmer footing next year.”

The UK’s GDP for Q2 was revised upwards slightly last week to a contraction of 0.5%.