Increased Consumer Spending Boosts U.K.’s Economy

According to the latest forecasts of a business group, increased consumer spending in the UK along with the nation’s dominant services sector will grow faster than expected.

Great Britain is expected to up its GDP 2.6%, higher than the previous 2.3% that had previously been estimated. This will keep the nation near the top of the G7 league tables. Furthermore, the U.K.’s GDP is expected to grow 2.7% in the next two years.

Those recent predictions are in contrast to another recent survey that suggests a decrease in the U.K.’s services sector along with a slump in exports and manufacturing.

The survey conducted by the National Institute of Economic and Social Research that had been published yesterday estimated economic growth in the previous quarter to the end of August at 0.5% while growth in the three months previously had been 0.6%.

Yet, this data is likely to be influenced by the Bank of England’s Policy Monetary Committee which will be deciding when to start raising interest rates today.

Other experts are warning about possible “further bumps in the road” due to low productivity, the current crisis in China and weakness in the Eurozone.

There are still domestic and external challenges facing the UK economy, according to David Kern, the BCC’s ‘s chief economist.

‘Low productivity, and curbing the unacceptably large fiscal and external deficits, are the biggest challenges. Job creation may also be impacted by the large increases in the minimum wage.’, he was quoted saying.