John Cridland (pictured), CBI director-general, said: “The UK economy’s continued strong performance is a clear sign of its resilience in the face of turbulent times overseas.
“Manufacturers are enduring tougher conditions, as a persistently strong pound is hamstringing our export competitiveness alongside dampened global growth. But our domestic story is strong and overall we are now in a phase of stable but solid economic growth.”
The CBI’s quarterly forecast revealed solid growth, despite a modest downgrade for 2015, from 2.6% in August to 2.4%. The CBI said this reflected weaker investment growth, driven largely by recent changes to official data. Next year the business group expects the UK economy to grow at 2.6%, down from 2.8%, as a gloomier global outlook means that net trade will drag on growth.
Concerns over the global economy have been flagged by the Monetary Policy Committee. Consequently, the CBI said it now believed an interest rate rise was likelier in Q2 next year, rather than Q1 as predicted in the business group’s previous forecast.
The business group also unveiled its first forecast for 2017, predicting solid UK growth at 2.4%, with a gradual rise in inflation easing household spending.
Cridland added: “Overall we must continue to put solid foundations in place to support the economy. That means ploughing ahead with critical infrastructure decisions, such as aviation capacity, maintaining flexibility in our labour market and keeping an open door to businesses and talent from abroad that create jobs and boost our economy.
“Tackling these issues is just as important for businesses as securing reform in the European Union and is crucial for the UK to meet its global ambition in the face of stiff competition.”
