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Britain's CBI bumps up economic growth forecast for 2017
June 19, 2017 / 11:15 PM / 5 months ago

Britain's CBI bumps up economic growth forecast for 2017

LONDON (Reuters) - The Confederation of British Industry on Tuesday bumped up its forecast for economic growth in Britain, reflecting strong momentum towards the end of last year rather than any fundamental change to its view.

FILE PHOTO: Construction cranes are seen on a residential building project behind homes in London, Britain, October 26, 2016. REUTERS/Toby Melville/Files

Britain’s economy looks on course to grow 1.6 percent this year and 1.4 percent in 2018, compared with forecasts made in November for 1.3 percent and 1.1 percent, the CBI said.

The CBI’s forecasts predate the June 8 national election in which Prime Minister Theresa May lost her majority in parliament, throwing Britain into one of its worst political crises in decades.

“Even accounting for weaker growth at the start of 2017, the momentum from last year gives us more of a lift as we move ahead,” said Rain Newton-Smith, CBI chief economist.

Like the Bank of England, the CBI’s forecasts rely on a “smooth” transition as Britain leaves the European Union.

It expects quarter-on-quarter growth rates of around 0.3 to 0.4 percent through to the end of 2018, roughly half the average seen since 2013.

“Very little has changed in our view of the nature of the outlook. Growth will be slower in the years ahead as living standards are hit by rising inflation; and after some initial strength, uncertainty will weigh on business investment,” Newton-Smith said.

Reporting by Andy Bruce; Editing by Toby Chopra

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