The British Chambers of Commerce has increased its 2014 GDP to 3.2% from 3.1%, the highest growth rate since 2007. It has also upped its forecast for 2015 to 2.8% from 2.7% and left 2016 unchanged at 2016.
The increase reflects stronger employment figures and higher than expected growth in Q3 and Q4 2014 than previously forecast in May.
The business group, which represents thousands of companies across the UK, is forecasting a moderate slowdown in growth from 2015 reflecting a deceleration in household consumption and falling public spending as a share of GDP.
BCC Director General John Longworth says we must do everything possible to ensure the strong growth in 2014 is not a flash in the pan. He calls the expected slowdown in 2015 and 2016 a warning sign for the UK which is currently too reliant on consumer spending as a growth driver. He added “We must make sure the stellar growth in 2014 is not a flash in the pan.”
The BCC is forecasting GDP growth of 0.8% in Q3 2014 but has reduced its estimate of exports of goods and services to 0.8% for 2014 from 1.9% and to 4.1% from 4.2% in 2015.
The group is still forecasting the first rise in UK interest rates in Q1 2015 to 0.75% with interest rates reaching 2.25% by Q4 2016. It also expects the unemployment rate to continue to fall to 5.5% in Q2 2015, 5% in Q2 2016 and to 4.9% in Q2 2017.
A report from Incomes Data Services (IDS) says UK businesses are planning to hire more graduates this year as confidence in the economic recovery grows, but warns that job seekers fresh out of university should expect lower starting salaries.
UK employers are expecting to take on 18% more graduates this year following a 4.3% increase in 2013. The study surveyed over 100 organisations and found that the financial services sector was particularly bullish looking to emply 42% more graduates this summer than last year while both the manufacturing and service sectors are also positive with growth of 22% forecast.
However, while the number os jobs available is rising, the average starting salary will drop, the IDS warned. Around 60% of employers froze their graduate starting salaries again last year and 65% have not increased their rates for 2014.
The UK economy continues to grow at a strong pace according to the latest CBI growth indicator. The survey of 726 respondents across the manufacturing, retail and service sectors posted its highest reading since data began in 2003 with a balance of +35%, up from +25% in April.
The CBI’s growth indicator suggests the UK economy has continued to perform strongly going into the second quarter of 2014, with the pace predicted to remain firmly above average for the coming quarter as well (a balance of +30 for expected output growth for the next three months).
Growth strengthened in retail sales and business volumes for the business and professional and consumer services sectors in the three months to May, with manufacturing output continuing to grow at the same solid pace as the previous two months.
CBI Deputy Director-General, Katja Hall, said: “The Uk economy is performing strongly and this thanks to rising business and consumer confidence, better credit conditions at home and improving global economic conditions.”
“What’s encouraging is that growth is becoming more broad-based, with solid increases in business investment over the part year. This bodes well for the year ahead.”
A survey for office supplies group Viking found that the price of a happy worker is just £476 a year as long as employers spend it the right way. Small companies can boost their workforce’s morale by investing that amount per staff member in a combination of social events such as trips to the pub and training courses, according to the new research.
More than four out of 10 employees working in businesses with fewer than 50 staff said they were unhappy at work. But managers could raise happiness levels by 35% if they spent £286 on training and £190 on staff outings.
The figure was derived by asking workers what the biggest factors of being happy, or unhappy, were during their working day. These were then put against the three most consistently reported drivers – training, social outings and salary – to discover the ‘price of happiness’.
The data revealed that with targeted spending of just £476, moral could be improved by more than third, while a pay rise of £5,000 yielded only a 3% increase.
The most common causes given as making workers unhappy were stress, not feeling challenged by their roles and poor internal communication about the company’s goals and aims. Another area that could boost levels of employee engagement was utilising unproductive times efficiently. The research found that from 10am until noon on Tuesdays staff were operating at their peak performance, while from 4pm until 6pm on Mondays and Fridays they were at their worst. It suggested using these periods for updates on the bigger picture for the company.
The latest KPMG/REC report on the UK labour market for April shows it continues to be in a very healthy state. Permanent staff placements rose at a strong and accelerated rate, although the rate of expansion remained below February’s recent peak. Temp billings also rose at a robust pace, albeit the lowest since June 2013.
Demand for staff remains strong with a further increase in vacancy levels during April. The rate of growth in demand for staff was broadly unchanged from March’s elevated pace.
However, the availability of candidates to fill positions declined at a faster rate in April For permanent candidates, the latest fall was the sharpest since October 2004, while for temporary workers it was the steepest since December 2000.
This decline in availability has started to fuel growth in permanent salaries which accelerated further in April, the most marked increase since July 2007. Temporary staff pay also increased.