UK economic growth is likely to remain tepid next year, the Confederation of British Industry warned on Monday, as higher interest rates continue to hit home.
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Publishing its latest economic forecast, the CBI said GDP was likely to grow by 0.8% next year, only a marginal improvement on this year's 0.6% uptick. Growth is then forecast to pick up to 1.6% in 2025.
In June, the CBI forecast the UK economy would grow by 0.4% this year but by 1.8% in 2024.
The CBI said consumer spending would remain weak well into 2024 growing by just 0.4%, unchanged on 2023 as higher interest rates curtail spending.
The Bank of England has now raised rates 14 times since December 2021, to 5.25%, as it looks to tackle surging inflation.
Louise Hellem, chief economist, said: "Amid the sheer degree of headwinds that the economy has faced over the last couple if year, businesses and households have shown remarkable resilience.
"But that is by no means job done. Businesses are gearing up for another tough year ahead."
Alpesh Paleja, the organisation's lead economist, added: "Stagnation is nothing to write home about. While we expect growth to pick up eventually, it remains below the norm seen in the years prior to the pandemic.
"Risks to the outlook are also numerous. At home, the spectre of high inflation could linger for longer, and sluggish demand could mean that investment plans remain on hold.
"While we expect global growth to hold up, prospects in the Eurozone our biggest trading partner are notably weak." ■
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