The economy will grow by 2.5 per cent in 2015, and 2.4 per cent in 2016, according to the National Institute of Economic and Social Research (NIESR).
The NIESR have predicted that unemployment will stabilise at about 5ΒΌ percent and said that the CPI inflation rate remains close to zero for most of the year. Future productivity growth remains the largest single uncertainty facing the UK economy.
The institute have released the following statement:
βAlthough growth in the first quarter of 2015 was considerably weaker than expected, this is likely to be a temporary deceleration. We expect growth to rebound through the remainder of this year.
βFaster than expected productivity growth would boost output, raise living standards and ease fiscal pressures; even slower than forecast productivity performance would make matters considerably worse. Employment growth continues to be strong; we expect unemployment to fall to about 5ΒΌ per cent at the end of the year.
βOur projections assume the government sticks to the fiscal plans set out inΒ Budget 2015.Β However, in practice, any future government is likely to pursue a somewhat looser fiscal policy. As our earlier work shows, this would lead to slightly higher growth and employment for the next few years, combined with slightly higher short-term interest rates and a slower rate of reduction in the deficit and debt to GDP ratio β relatively modest effects compared to other uncertainties highlighted above.β
Steff joined the HRreview editorial team in November 2014. A former event coordinator and manager, Steff has spent several years working in online journalism. She is a graduate of Middlessex University with a BA in Television Production and will complete a Master's degree in Journalism from the University of Westminster in the summer of 2015.
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