The business lobby group reckons growth this year will hit 1.3%, way up from its original forecast of 0.9%. Its forecasts for the next couple of years have also risen, to 2.2% in 2014 and 2.5% in 2015. That’s practically ‘normal’ conditions.
The change is mainly down to better-than-expected performances by the services and manufacturing sectors, as well as retail, which enjoyed something of a resurgence over the summer.
It also said it expects unemployment to fall to 7.5% by autumn next year, and below Mark Carney’s all-important 7% mark by the end of 2015 – months before the Bank of England governor’s prediction of 2016.
That’s of note because forward guidance issued by the Bank last month said it wouldn’t raise interest rates until unemployment reaches that level. If it’s going to be earlier than expected, that makes planning ahead more difficult.
But some factors could yet stop that growth in its tracks: although things are beginning to look up for western economies, things are looking less positive in emerging markets. Everything from the threat of war in the Middle East to slowdowns in India and China pose a threat to our (still very fragile) recovery.
So no wonder BCC director general John Longworth remained cautious.
‘Unfortunately the recovery is not yet secure,’ he said.
‘We have had false dawns in recent years and although this upturn appears to be on stronger ground, we must be aware that complacency could lead to setbacks.’
In other words (and to use another depressingly ubiquitous phrase): keep calm and carry on. We’re not out of the woods yet.