The latest forecasts for the UK’s economy has indicated that the country has bounced back from recession and avoided a double-dip. With the Bank of England promising to keep interest rates low, this has come as a blessing to many people looking to borrow mortgage loans or credit cards but are likely to be an ongoing burden for investors and those hoping to save money.
Economic forecasters are suggesting that the economy will grow by around 1.4% this year and by a further 2.2% over the course of next year.
In spite of this, the Ernst & Young ITEM Club has suggested that Britain is expected to experience a “soft patch” over the winter months as the recovery’s pace loses it’s momentum.
Peter Spencer, Chief Economic Advisor for the club, commented:
“The economy is likely to slow over the winter following a surprisingly positive first half of the year but I think this will be a soft-patch, not a double-dip.”
Mr Spencer went on to say that the UK will probably have to wait until late 2011 before experiencing any significan economic improvement. However, he added that with rising unemployment, low wage growth and high levels of inflation the average British household is in for a tough ride.
The club went on to state that interest rates are unlikely to go up until 2014 which is inevitably good news for borrowers looking for mortgages, personal loans or credit cards. However, this isn’t good news for consumers looking to save money as interest rates on savings accounts will remain low.