Prospects for the UK economy: main points
Posted on January 31st, 2011
- Growth
UK gross domestic product (GDP) will grow by 1.5pc, compared with 1.4pc in 2010. Growth of 1.8pc is forecast for 2012.
- Jobs
Unemployment is expected to rise by another 260,000 this year, and peak at 8.8pc in the third quarter of 2011.
- House prices
Real house prices are expected to fall by an average 2pc a year over the next five years.
- Interest rates
NIESR forecasts the Bank of England will raise interest rates three times during 2011, to above 1pc.
- Disposable income
The average disposable income is expected to decline by 0.8pc in 2011, after declining by 1pc in 2010, but return to growth of around 2pc in 2012.
- Savings
The savings ratio is expected to climb to 7.75pc by 2015, a level not seen since the 1990s.
- Taxes
Further tax rises will be needed to meet the Government’s budget targets.
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