CBI upgrades British economic growth forecast in 2015

The Confederation of British Industry (CBI) Monday announced that it has upgraded British economic growth forecast this year to 2.7 percent from 2.5 percent it expected in November 2014.

It also expects British GDP to grow at 2.6 percent in 2016.

CBI expects Britain's GDP growth to remain steady throughout this year, rising by 0.7 percent each quarter, following by quarterly growth of 0.6 percent in 2016.

The business lobbying group expects that British consumer price inflation to stay below one percent throughout most of 2015. Business investment is able to continue provide "sturdy support" to GDP growth, rising by 5.8 percent in 2015 and by 6.5 percent in 2016.

The UK's export will also see some improvement, with growth increasing from 2.9 percent this year to 5.5 percent next. Britain's unemployment rate is expected to level off at 5.2 percent in 2015.

Katja Hall, Deputy Director-General at CBI, said in a statement: "UK growth continues to outshine its counterparts in Europe and progress is 'steady as she goes'."

She noted that falling unemployment coupled with improving wage growth and rock bottom inflation should mean that people see more money in their pockets.

But CBI also stresses that political volatility, both domestic and foreign, continues as the UK general election approaches, Greece's fiscal position remains in the spotlight and instability continues in Ukraine.

"As a result, exporters are finding it harder to secure orders and net trade is unlikely to provide much of a boost to growth over the next two years," it said.

The lobbying group also expects that the Bank of England will not raise interest rates until early 2016. Endit