Growth forecasts downgraded

Economic Outlook: OECD

  • The global economy continues to expand at a moderate pace, with some acceleration of growth anticipated in 2014 and 2015.
  • Global growth forecasts have been revised down significantly for this year and 2014, in large part due to weaker prospects in many emerging market economies.

Economic outlook for business

Economic outlook for business: Ernst & Young Autumn 2012 UK forecast

  • The forecast sees a return to growth in the second half of this year, leaving GDP down by 0.2% on the year.
  • Trade performance in the first half of the year has been deeply disappointing, offsetting the positive effect of falling inflation and rising employment on consumption.
  • GDP grows by 1.2% next year and 2.4% in 2014 and 2015.
  • Recovery in the mortgage and housing markets next spring.
  • The fall in government borrowing over the forecast period to be more gradual than the OBR anticipates, largely for cyclical reasons. However, the OBR may view this deterioration as structural and suggest that further policy tightening is necessary after the next election if the Chancellor is to meet his fiscal targets.