The Confederation of British Industry (CBI) has upgraded its forecast for GDP growth as the recovery continues to take hold. But it warns politicians of all shades to put incentivising business investment ahead of short-term electioneering.
The CBI—the UK’s leading business group—is forecasting GDP growth of 3.0% in 2014, up from the previous forecast of 2.6%, and 2.7% in 2015, up from 2.5%.
The economy grew by 0.8% in the first quarter of 2014 and quarter-on-quarter GDP growth of 0.7% is expected for the rest of this year and next.
Yet while economic signs are encouraging, the CBI said political uncertainty remains a major risk to the recovery. Setting out its headline priorities one year out from the general election, the CBI urged politicians to stick with what is working and tackle the UK’s long-term economic challenges.
Among the measures the CBI is calling for are committing to eliminate the budget deficit, scrapping the immigration target and raising the tier 2 visa cap, ensuring big infrastructure decisions are taken with a long-term strategic view and avoiding damaging market interventions.
John Cridland, CBI Director-General, said: “The UK now has more stable economic foundations, and political risks must not jeopardise this.
“The recovery is advancing after a strong performance in the first quarter of 2014. Prospects are bright and we expect the recovery to broaden out this year, with greater support from business investment in particular.
“Businesses recognise the realities of election time but want all parties to ensure their policies make a positive difference. Politicians must be wary of the risk of headline-grabbing policies that weaken investment, opportunity and jobs,” added Cridland.