You are here: Home - Uncategorized -

Interest rates to hit 2.75% by 2012, says CBI

0
Written by:
09/02/2011

Private sector employer trade body, the Confederation of British Industry expects inflation to stay “stubbornly high” this year, partly due to the impact of higher VAT but also due to pressure from rising energy and commodity prices.

However, it continues to predict, that the UK economy will grow in 2011 but has downgraded its GDP forecast from +2% to +1.8%.

The CBI said the UK is on the road to recovery, with growth accelerating in 2012, and maintains the risk of a double dip into recession is low.

John Cridland, CBI director-general, said: “With household spending under some considerable strain, we will be looking to business investment and exports to help deliver economic growth over the coming two years.

“While this growth will still be lower than the long-term average and unemployment will continue to creep up, job numbers will also increase as the recovery picks up,” he said.

Ian McCafferty, CBI chief economic adviser, observed that growth is far weaker than we would normally expect for the second and third year of an economic recovery.

“Persistently high levels of inflation, caused by rising energy, commodity prices and the VAT increase, are also a concern. This makes it more likely that the Bank of England will need to start putting up interest rates from their record low level from the second quarter of this year.”

The economist said he expects unemployment to hit 2.71m by the end of 2011 but drop slightly to 2.64m by Q4 2012.

Related Posts

Tagged:

Tag Box

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Five ways to get on the property ladder without the Bank of Mum and Dad

A report suggests the Bank of Mum and Dad is running low on funds. Fortunately, there are other options for st...

The essential Your Money guide to the April 2018 tax changes

As we head into the 2018/19 tax year, a number of key changes take place to existing policies while some new i...

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

  • Given the Brexit uncertainty, you may be looking to protect your pounds ahead of your next holiday. Here are five w… https://t.co/pjn2d3P41E
  • If you are concerned you may miss the 31 January HMRC deadline to file your tax return, here are five excuses that… https://t.co/BRoNxdNLXM
  • Millions of Lloyds, Halifax and Bank of Scotland customers unable to make and receive payments in latest bank IT me… https://t.co/bKospYHViX
  • RT @YourMoneyUK: Millions of Lloyds, Halifax and Bank of Scotland customers unable to make and receive payments in latest bank IT meltdown…
  • RT @YourMoneyUK: Millions of Lloyds, Halifax and Bank of Scotland customers unable to make and receive payments in latest bank IT meltdown…
  • Make sure you're not paying more than you need to for your #energy. Check when your fixed deal ends and pop a note… https://t.co/OCfiU236o1

Read previous post:
London house prices should buck trend

More surveyors than less expect positive price growth in the Capital for the first time since mid-2010.

Close