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The Centre for Economics and Business Research believes that the economy of United Kingdom will grow more rapidly than other European nations. By 2013, those countries in the euro zone will continue to be in recession with little growth in 2014. Britain is expected to grow 0.8% in 2013 and 1.4% in 2014. On the other hand, Germany will grow by 1.2% in 2014 and France by 0.2%. Other European countries like Spain and Italy, however, aren’t expected to do well. According to Centre for Economics and Business Research chief executive Douglas McWilliams, European nations are moving towards a position which is even non-existent to any Western economy during peacetime.
On the other hand, policymakers at the Bank of England are not keen on voting for any stimulus package to the economy within the week. It is believed that the Monetary Policy Committee will leave interest rates at 0.5% and quantitative easing at £375billion after it had been established that the economy has grown by 1% during the 3rd quarter.
According to McWilliams, there is a looming crisis of social breakdown in other parts of Europe due to government bankruptcy and unemployment. In Greece, bereft individuals have turned to prostitution and burglary to survive. He also warned that whatever happened to Greece can happen to other European countries like Italy. He believed that any austerity measures won’t be beneficial. McWilliams suggested that what Europe needs to do is to dissolve the single currency. This, however, has its initial repercussions. For Southern Europe, for instance, the countries there can survive on a lower exchange rate but this is currently not attainable because countries are in the euro zone.
The UK economy was able to survive the double-dip recession only this 3rd quarter through the help of the recently concluded London Olympics. On the other hand, the Centre for Economics and Business Research anticipates the euro zone economy to contract by 0.7% this 2012 and another 0.4% by 2013. By 2014, the centre is expecting these economies to grow slightly by 0.4%.
Furthermore, it also cautions the global economy about deteriorating outlook if the tensions in the Middle East are not abated. Also, the global economy is also expected to degenerate if the euro zone collapses. Because of this assessment, the centre has downgraded its global forecast from 2.6% down to 2.4% for the year. By next year, it also expects a downgrade of forecast from 2.7% to 2.5%.
On another report, the Confederation of British Industry has forecasted 0% growth for UK in 2012, up from its earlier forecast of -0.3%. It also adjusted its forecast for 2013 from 1.2% to 1.4% and 2% for 2014, believing that investment, net trade, and households will be able to contribute more.
