The year ahead

The economy is expected to pick up in 2014, according to the latest forecasts collated by the Treasury.

Gross Domestic Product (GDP) is forecast to rise by between 1.8% at the pessimistic end of the range up to 3.2% at the top end. The median (midpoint) forecast from the 39 forecasters is for growth of 2.6%. That is higher than the 2.4% forecast produced by the Office for Budget Responsibility (OBR) for chancellor George Osborne in his Autumn Statement last December.

The range of forecasts covers those made in the last three months, but when just the new forecasts produced in January are used the median figure from 25 forecasters is 2.7%.

Inflation forecasts for the final quarter of 2014 show a range for RPI inflation of 2.3% up to 4.0%, with a median figure of 3.0%. The OBR forecast is also for a 3.0% rise.

Average earnings forecasts suggest that workers’ living standards will continue to be hit as the range for the year is for rises of between 1.5% up to 3.1% and a median figure of 2.2%. The OBR forecast is 2.6%.

www.gov.uk/government/uploads/system/uploads/attachment_data/file/271286/201401forecomp.pdf