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CBI predicts higher economic growth

The Confederation of British Industry (CBI) has changed its predictions with regard to economic growth, and it has altered its thinking in relation to a possible rise in interest rates.

John Cridland, Director-General of the CBI, has said:

“The UK now has more stable economic foundations, and political risks must not jeopardise this. The recovery is advancing after a strong performance in the first quarter of 2014. Prospects are bright and we expect the recovery to broaden out this year, with greater support from business investment in particular.”

The CBI has suggested that economic growth may be as high as three per cent this year. It has also increased its growth estimate for 2015. The confidence behind these revised forecasts is positive and reflects a growing consensus about the prospects of the national economic recovery.

With reference to interest rates, the CBI has stated that a small rise may happen during the first few months of next year. If the Bank of England does take this kind of action, it may have a small impact on the housing market.

The CBI has stressed that the housing market in London is quite different from that in the rest of the country. Nonetheless, the business group has commented on the general shortage of homes that is driving prices upwards.

If the economy does make progress in line with what the CBI has predicted, the demand for solid flooring in Cheshire is likely to increase. A small rise in interest rates may not have a profound influence on demand in this area.

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