Financial think tank the National Institute of Economic and Social Research (NIESR) has said that by the end of the year, Britain?s economy will show marked signs of growth. However, their academics also revealed that this growth will not be strong until at least 2013.
The view is that by the end of the last quarter, the economy will increase by 0.5 per cent. This follows a 0.1 per cent drop in the third quarter and will be effected by ?a turning point in the inventory cycle and the impact from the sales tax cut?.
Once again, the banks are a source of blame. ?The weakness of bank lending remains as a concern and it is necessary that it strengthens if the economy is to return to sustained growth. Lending by monetary financial institutions remains weak,? the NIESR report said.
The NIESR is aniticipating that the economy will see a 4.3 per cent contraction over the year which is the worst decline since World War II. The UK property market has become more buoyant, although according to the think tank, the price of houses are still over-valued and are expected to continue to fall until the middle of 2011.
?We expect to see continued contraction in consumer spending and private sector investment,? said Simon Kirby, a research fellow at the NIESR. He added that lending was key for sustainable growth in the economy.
Even with the economy continuing a growth pattern, the forecast is that the numbers of those without jobs will rise, reaching the three million mark in 2011.
