GDP growth 'will be 1.4%' in 2013
The economy will grow by 1.4% this year and by 2% in 2014, says the National Institute of Economic and Social Research (NIESR).
The economic research company has upwardly revised its forecasts for the UK's growth prospects after downward shifts at the end of 2012.
Alongside this there is likely to be a slightly drop in public sector borrowing for the 2013/14 fiscal year, down to 7% of GDP and a further fall to around 6% the following year.
NIESR says an uptick in consumer spending is the greatest factor in the improving economic indicators for the country, but warns this may mean the recovery is not balanced and that 'greater net national saving' is needed.
A recovery in the property market is also expected to help underpin growth, but this could be just another consumer spending trend with house purchases being financed by lower interest rates.
UK economic growth for the third quarter of the year was confirmed at 0.8% recently, and those figures suggest a more balanced recovery with services, construction, production and agriculture all contributing to growth.
Azad Zangana, European economist at Schroders, says: "We do expect a slight pull back in the growth rate in the coming months, however, the surge in housing activity and the housing related consumption we expect to follow should keep the UK growing at a steady pace through 2014."
This article was written for our sister website Money Observer
An increase in the general level of prices that persists over a period of time. The inflation rate is a measure of the average change over a period, usually 12 months. If inflation is up 4%, this means the price of products and services is 4% higher than a year earlier, requiring we spend and extra 4% to buy the same things we bought 12 months ago and that any savings and investments must generate 4% (after any taxes) to keep pace with inflation. Since 2003, the Bank of England has used the consumer prices index (CPI) as its official measure of inflation (see also retail prices index).
The total money value of all the finished goods and services produced in an economy in one year. It includes all consumer and government consumption, government spending and borrowing, investments and exports (minus imports) and is taken as a guide to a nation’s economic health and financial well being. However, some economists feel GDP is inaccurate because it fails to measure the changes in a nation's standard of living, unpaid labour, savings and inflationary price changes (such as housing booms and stockmarket increases).
The Consumer Price Index is the official measure of inflation adopted by the government to set its target. When commentators refer to changes in inflation, they’re actually referring to the CPI. In the June 2010 Budget, Chancellor announced the government’s intention to also use the CPI for the price indexation of benefits, tax credits and public sector pensions from April 2011. (See also Retail Prices Index).