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OECD Raises UK Growth Forecast

OECD Raises UK Growth Forecast

Since May, the OECD has increased its growth forecast for the UK economy from 0.8% up to 1.5% and has tentatively promised that the figure will continue to rise.

After recently completing its latest assessment of global prospects, the Organisation for Economic Cooperation and Development has announced that, although global growth as a whole seems to be sticking to a slower pace; the UK, North America and Japan are expanding their economic activity at “encouraging rates”. The OECD pointed out that in the first half of this year,  the UK’s economy started to bounce back after the dismal fall of recent years, and is likely to carry on increasing into the second half of 2013, and well into 2014.

On Monday, the manufacturing sector showed the highest growth in activity for two and half years, according to the PMI survey. The Markit Group compiles PMIs, also known as Purchasing Managers Indexes, and these figures help to forecast how the economy is going to look for the following weeks or months. PMIs also help to measure the business conditions in any economy.

Tim Moore, senior economist at the Markit Group, said, “The latest construction PMI figures are yet another indication that the UK economy has performed impressively over the summer months.”

And the UK isn’t the only place in Europe to have higher growth predictions. On Tuesday, the OECD said that some countries in Europe have already started to pull back their economy, with France and Germany in particular looking to expect an increase much higher than previously thought.

The OECD is an international economic organisation whose role is to stimulate and monitor economic progress and world trade. The OECD believes that problems in emerging economies are cancelling out the advanced economies on the mend. As many of the 34 countries monitored by the OECD are still struggling to face the challenges of a slower economic growth, the OECD urges their governments to try to improve support to their economic growth by attempting to rebalance the global economy and trying to reduce the structural impediments in place. It is hoped that this will pave the way for more jobs and therefore a growth in the economy.

It is possible that with the record breaking temperatures that the UK and other countries have enjoyed over the summer, tourism has increased dramatically, especially since last year, and may well have helped to give the economy that extra boost that it needed.

CC Image courtesy of Lawrie Cate on Flickr

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