The next quarter is full of economic promise, according to a report released by the Confederation of British Industry (CBI).
The CBI’s latest growth indicator said output rose and the UK’s economic recovery is under way.
Manufacturing output stayed solid, while there was continuing growth in the retail and service sectors, said the CBI.
“The outlook for the next three months is exceptionally strong and broad based, with growth expectations the strongest since the data began in 2003,” said the CBI.
Katja Hall, the CBI policy director, said that even though “consumer” spending formed most of GDP growth in 2013, “there are firm indications of growth becoming more broad based. It’s good see that business investment has consistently contributed to quarterly growth since 2013”.
Productivity and earning will recover this year, while general growth is fuelled by rising business and consumer confidence as well as “supportive monetary conditions”, said Hall.
The politicians might say that things are getting better but a multinational corporation seems to have its finger on the pulse of the UK economy and it’s not happy.
Tesco released its interim management statement for its third quarter and the outlook is far from rosy.
According to Philip Clarke, the Tesco CEO, like for like sales fell by 1.5 percent, mostly due to a weaker grocery market.
He said: “Continuing pressures on UK household finances have made the grocery market more challenging for everyone since the summer and our third quarter performance reflects this.”
He said its decision to open fewer stores is holding back Tesco’s performance “in the short term”.
Clarke said that “consumers are still managing the effects of an unprecedented period of declining real incomes and a higher cost of living. The average spending power of a typical UK household is around 10 percent below its 2007 peak in real terms”.
Things are not going particularly swimmingly in its foreign markets, Tesco said.
The Office of National Statistics (ONS) said that the UK GDP increased by 0.8 percent in the third calendar quarter, compared the second quarter of this year.
That’s the third consecutive quarter the UK has seen an increase, but the picture is patchy in the four industrial groupings the ONS has under its purview.
Output in Q3 increased by 1.4 percent in agriculture, 0.5 percent in production, 2.5 percent in construction and 0.7 percent in services. The services sector is now above its peak in the first quarter of 2008, before the economic earthquake brought recession. The other sectors still have a long way to go before they recover.
The services section includes distribution.
The rise in the construction sector is believed to have been fuelled by UK government stimulating the housing market.