ITEM club predicts healthy grow rate
The British economy will grow by 3.1% this year and again in 2005 according to upbeat predictions from the Ernst & Young Item Club.
A combination of a more powerful global economy, a recovery in exports, sustained high street spending and more investment in IT and services will see the UK power ahead in the next two years.
Even a housing market slowdown and an interest rate hike to 5% will not put the brakes on growth the optimistic Item Club argues.
‘After three years of misfiring, the economy is now firing on all four cylinders,’ said Peter Spencer, chief economic adviser to the ITEM Club. However, there are words of warning.
The ITEM club fears that the current growth has been promoted for political reasons rather than economic and the boom could eventually turn to bust