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The Confederation of British Industry (CBI) has forecast that UK interest rates will rise from 0.5% to 0.75% in early 2015.
This prediction has been brought forward from the July to September period to the first three months of 2015.
The CBI also revealed they are expecting 2.7% growth in 2015 which is up from a previous estimate of 2.5%. As a result, an increase in business investment suggests a reason for the improved outlook.
However, the CBI warned political uncertainty remains “a major risk to the recovery” and can impact business confidence. It could signal the start of small increases causing concern for businesses with large amounts of borrowing. The CBI director-general John Cridland said; “Businesses recognise the realities of election time but want all parties to ensure their policies make a positive difference.” He went on to add; “Politicians must be wary of the risk of headline-grabbing policies that weaken investment, opportunity and jobs.”
The National Institute of Economic and Social Research (NIESR) commented that the UK economy was close to regaining its level of economic activity pre-financial crisis. John Cridland commented; “We’re sensing entrepreneurs across the whole economy, service, manufacturing, exporters and even the domestic economy feeling more confident and making more investment.”
While there may be an air of confidence around the UK economy, there has not been recovery of all businesses. So if your business is struggling with debt, we can help.
Source: BBC Business News