Some more good news has recently come out from both the Organisation for Economic Co-operation and Development (OECD) and from the Bank of England (BoE). Both are predicting rapid growth in the next year and both have revised 2013’s growth as well. Here’s what they are saying:
- From the OECD: 2013’s economic growth in the UK has been upgraded to 1.4% from 0.8% and 2014 UK growth is set to rise to 2.4%.
- From the BoE: 2013’s economic growth in the UK has been upgraded to 1.6% from 1.4% and 2014 UK growth is set to accelerate to 2.8%.
According the BoE, inflation has not been as high with a surprise drop in consumer prices brings it to 2.2%.
The announcements made yesterday at an OECD and BoE press conference confirms that the UK might be out of the worst of it regarding the fallout from the 2009 economic crash and subsequent back to back recessions and whilst most of Europe struggles to get in to positive growth territory the UK is rapidly climbing onwards and upwards.
Whilst this is great news for the UK as a whole, the growth may bring forward interest rate rises which will effect both businesses and consumers with mortgages holders in particular at potential risk.
The BoE’s forward guidance policy, introduced this August states that the Bank has pledged not to raise interest rates until the jobless rate comes down at least to 7%. Hitting 7% sooner could mean an earlier rise in interest rates. That would, in turn, mean higher repayments on loans and mortgages for many businesses and households.
The new Bank of England chief, Mark Carney has tagged any interest rate rises to unemployment has bought forward the predicted deadline of the 7% unemplyment threshold from 2016 to the third quarter of 2015.
The revision has come as the official figures show the jobless rate declined to 7.6% in the three months to September, down from 7.8% in the previous quarter which is the lowest rate for three years.
The 2014 UK growth figures of between 2.4-2.8% means that 2014 should be a great year for businesses in Hastings and Rother and it should be an interesting year ahead.
Let us know your views on this. Has your business seen a general pick up in the past year. Are you feeling more confident going in to 2014 then you were in 2013? Are you preparing for any interest rate rise? We ‘d love to hear from you so leave your comments in the below.