NIESR raises UK growth forecasts as consumers spend more
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UK consumer spending more that the economy will grow faster than previously thought this year and in 2014, the macroeconomic leading think tank said on Friday.
National Institute of Economic and Social Research (NIESR) raised its 2013 and 2014 economic growth forecast by 0.3 percentage point to 1.2% this year, 1.8% next year.
Posted in 2012, a slight increase of only 0.2%, the British economy grew by 0.3% in the first three months from the first three months of this year by 0.6% in the second quarter.
NIESR said: "The improved outlook for economic growth is mainly due to an increase in consumer spending growth prospects."
Now its growth forecast slightly higher than July 11 for the second quarter GDP data released prior to the consensus of economists polled by Reuters. They are also stronger than the International Monetary Fund (IMF) latest forecast.
However, NIESR sustainability of consumer demand questioned, and that it is driven, rather than higher disposable incomes lower household savings.
"Although consumer spending growth is a necessary component of a balanced recovery will require net exports and gross fixed capital formation is a major contribution, we see relatively few signs," NIESR said that.