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Economic growth 'will ease'
THE UK’s economic recovery will ease as growth loses some of its momentum, a business group has warned.
The CBI says the economy will slow down towards the end of the year, with the deceleration continuing into 2015.
Bosses have forecast three per cent growth in 2014, with the figure dropping to 2.7 per cent next year as growth steadies, reflecting the continued weakness of productivity and slow wage growth.
They added weakness in productivity has been accentuated by tight credit conditions holding back business growth, adding investment remains 16 per cent below its pre-crisis peak.
John Cridland, CBI director-general, said it expected workers’ wages to rise as the recovery continues, but said companies are facing a number of issues, such as the Scottish referendum and EU membership.
He said: “The recovery is on solid ground and for the rest of this year we expect growth to get onto a more even keel.
“Business investment has been growing better than expected so far this year, but it still has a lot of catching up to do to get back to its pre-crisis level.
“Although hundreds of thousands of new jobs are being created in the economy, there is little upward pressure on starter salaries outside of a few hot spots, such as in parts of the IT sector.
“For longer-term staff though, awards are often a little higher and we expect wages to pick up across the board next year as the recovery continues.
“But businesses are still facing a significant amount of uncertainty, with the Scottish referendum, the General Election and Britain’s place in the EU.
“Growth is firmly on track, but businesses need politicians to focus on the long-term economic security, not just on winning the political race.”