Share this post

There have been so many different predictions about what 2012 will look like overall from a GDP perspective that is has been hard to keep track of them. Depending on which institutions you listen to and whether you keep up with all of their later revised predictions, you might be expecting Britain’s economy to have shrunk during 2012, grown a little bit, or possibly not moved at all.

Now, to add to the confusion, but with a touch of optimism ingrained in the prediction too, the Confederation of British Industry have upgraded their estimate for 2012’s GDP movement to 0.0%, meaning that they believe the year overall will show no change and leave us in the same position we were at the end of 2011 in terms of the size of our economy.

Of course, it isn’t quite that simple. Technically, we are much better off than we were at the end of 2011, especially if growth is flat overall, as the last three months of 2011 saw us enter a double-dip recession, one that continued for the first half of 2012. It also means that they see our economic prospects improving, as their previous prediction was for a 0.3% reduction in GDP overall for 2012. Anything that shows the economy doing better than previously predicted will be very welcome news for the government, businesses and consumers.

2013 and 2014 forecasts remain optimistic, with the CBI predicting 1.4% growth for the first and 2.0% for the second, though these will undoubtedly be subject to their own revisions as the picture becomes clearer as well.

Even if these forecasts do not end up showing an accurate lay of the land, it is useful to know which groups feel the economic situation is improving and which are less confident, and this close to Christmas, any good news is welcome.