- Bank of England predicts growth at 3.5% in 2014, 2.9% in 2015 and 2.4% in 2016
- Inflation will remain around 1% over the next year, rising only slightly to 2% in the following year
- The spare capacity in the economy is estimated at around 1% of GDP
Commenting on the Bank of England’s Quarterly Inflation Report, David Kern, Chief Economist at the British Chambers of Commerce (BCC) said:
“Although the Bank’s growth forecast remains more optimistic than our own, the main takeaway message is that inflation will stay below target for longer than previously expected. Consequently, the prospect of interest rate rises will be delayed for some time. This message will be welcomed by UK businesses who will be reassured that they can plan and invest without any surprises.
“We support the Governor’s statement that the timing of interest rate rises will be determined by official data, and any increases should be slow and gradual. The UK is out-performing its main competitors in the eurozone, but we cannot escape the challenges facing our exporters. We urge the government and the MPC to do everything in their power to ensure Britain’s recovery is sustainable, and hope the Chancellor uses next month’s Autumn Statement to announce measures that support growth and enterprise over the long term.”