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NIESR: No UK recovery before 2018
Economic output per person in the UK will not recover to its pre-crisis peak until 2018, according to the National Institute of Economic and Social Research (NIESR).
The forecaster warned “real per-capita GDP” is only half way to recovering from the slump suffered over the past few years, the Telegraph reports.
“This represents the slowest post-recession recovery in output in the past 100 years,” NIESR said.
It also downgraded its UK forecasts again, cutting its 2013 growth outlook to 0.7% from November’s estimate of 1.1%.
NIESR also predicts next year will be weaker than anticipated, with growth at 1.5% instead of 1.7%. However, it now believes GDP in 2012 was flat, rather than contracting by 0.1%.
The group repeated its calls for “a significant increase” in public spending on infrastructure projects to support the recovery. It also wants “radical reform of the financial sector to support lending to the real economy”, according to the Telegraph.
NIESR predicted public debt could only start falling in 2017-18. This is two years later than the Chancellor’s self-imposed target and a year later than the current official forecast.
