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UK economy growing fastest in G7

22 Jul 2014

More than any other G7 economy, the UK is predicted to show the strongest growth in 2014, according to an EY Item Club report.

Their quarterly forecast shows that UK GDP growth will reach 3.1% in 2014, thanks largely to capital investment by businesses.

According to the report ‘two drivers are central to this low-inflation recovery. First, the labour market is providing the best of both worlds, boosting incomes through rising employment rather than wages, while keeping inflation low through an expanding workforce. Second, business investment has rebounded even faster than expected, generating over half the UK’s growth over the past year and supporting the much-needed rebalancing’.

Mark Gregory, EY Chief Economist, lists some steps which businesses should take to capture their share of the upturn:

  • Evaluate the areas you operate in to see how they are developing
  • Think about what higher business investment means for you
  • Examine the potential to move back up the value chain
  • Reconsider mergers and acquisitions, with deal prices returning to normal
  • Remember that austerity is still a key policy of this Government
  • Ensure you are ahead of the game, seizing opportunities and not playing catch-up

The full report can be viewed here.