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UK economy in slow and steady recovery, CBI says UK businesses 'want to stay in Europe'
(about 3 hours later)
The UK economy is recovering at a "slow and steady" pace, business lobby group the CBI has said. Businesses in the UK would prefer to stay in Europe and reap the benefits rather than leave, according to the CBI lobby group.
It predicts growth this year of 1.4%, up from the 1.2% forecast in August, following a strong third-quarter performance. "On balance, British business believes its better to be in the European Union and reform it from the inside," CBI director-general John Cridland told Sky News.
The CBI expects a growth rate of 2.4% in 2014. He is to tell his members EU membership is worth £3,000 to every UK household.
"The recovery that started in the service sector has fanned out to manufacturing and construction," CBI director-general John Cridland said. The government wants to negotiate a new deal with the EU.
If he can secure a new deal, Prime Minister David Cameron has pledged a referendum on the UK's relationship with the EU by 2017 should the Conservative Party win an outright majority.
At the annual conference for the lobby group on Monday, Mr Cridland is to say that a CBI-commissioned report found that the benefits of being within the EU "significantly outweigh" the costs.
"UK business is pragmatic and realistic," Mr Cridland told Sky News on Sunday. "Half our exports go to the EU. We need the single market."
The BBC's business correspondent Joe Lynam said: "EU membership may be a prickly political football, but when it comes to whether membership is profitable, the CBI membership is in no doubt that Britain should remain in. Of course, that support is contingent on real reform of EU structures and especially what employers consider unnecessary red tape and meddling.
"That the main business group is wholeheartedly in favour of staying in, will be welcomed by moderate thinkers within Downing Street. The real issue though will be whether these views alienate or resonate with the wider public's view."
The comments come after the group suggested the UK economy was recovering at a "slow and steady" pace.
'Not spectacular recovery'
The CBI predicts growth this year of 1.4%, up from the 1.2% forecast in August, following a strong third-quarter performance.
It then expects a growth rate of 2.4% in 2014.
"The recovery that started in the service sector has fanned out to manufacturing and construction," Mr Cridland said.
Latest official figures showed that the UK's economy grew by 0.8% between July and September, with the Office for National Statistics saying there had been a "fairly strong" performance across all sectors.Latest official figures showed that the UK's economy grew by 0.8% between July and September, with the Office for National Statistics saying there had been a "fairly strong" performance across all sectors.
'Better-rooted' growth
"The UK is now set fair for growth with confidence returning to Britain's entrepreneurs," Mr Cridland added."The UK is now set fair for growth with confidence returning to Britain's entrepreneurs," Mr Cridland added.
"The recovery won't be spectacular, just slow and steady, but appears more solid and better-rooted.""The recovery won't be spectacular, just slow and steady, but appears more solid and better-rooted."
On Friday, a closely-watched survey added to signs of strength in UK manufacturing as the latest Markit/CIPS Purchasing Managers' Index indicated the sector had continued to grow strongly in October.On Friday, a closely-watched survey added to signs of strength in UK manufacturing as the latest Markit/CIPS Purchasing Managers' Index indicated the sector had continued to grow strongly in October.
Despite speculation among some analysts that interest rates may rise sooner than expected due to the stronger economic growth, the CBI said that it still expects rates to stay at record lows until 2015. Despite speculation among some analysts that interest rates may rise sooner than expected due to the stronger economic growth, the CBI said that it still expected rates to stay at record lows until 2015.
"We expect unemployment to come down relatively slowly over the medium-term, as hours worked increase and productivity begins to recover. Consequently, the CBI expects Bank rate to remain on hold in 2014 and 2015," it said."We expect unemployment to come down relatively slowly over the medium-term, as hours worked increase and productivity begins to recover. Consequently, the CBI expects Bank rate to remain on hold in 2014 and 2015," it said.
Bank of England policymakers have also spoken out in a n attempt to dampen expectations of a rate increase in the near future. Bank of England policymakers have also spoken out in an attempt to dampen expectations of a rate increase in the near future.
Under the policy of forward guidance, the Bank has said that it will not consider raising interest rates until the unemployment rate has fallen to 7% or below.Under the policy of forward guidance, the Bank has said that it will not consider raising interest rates until the unemployment rate has fallen to 7% or below.
The latest unemployment figures showed that the jobless rate stood at 7.7% in the June-to-August period.The latest unemployment figures showed that the jobless rate stood at 7.7% in the June-to-August period.