1. UK economic outlook

Abstract

he UK recovery finally gathered pace in 2013, led by the consumer and the housing market. We expect quarterly growth rates to slow a little through 2014, as the economy makes the transition towards more balanced growth, but our forecast shows growth averaging 2.6% over the year as a whole. The contribution of the consumer is expected to ease, given that there is little scope for households to reduce their savings any further and that the recovery in real incomes is likely to be steady rather than spectacular. But the outlook for both business investment and exports is likely to improve from this year, as the global recovery strengthens.