The Confederation of British Industry expects UK economic growth to slow in the final six months of 2014 but maintains its 3 per cent forecast for the year.
The economy grew by 0.8 per cent in the first two quarters of 2014 but the business trade body predicts this will drop back to 0.7 per cent in Q3 and 0.6 per cent in Q4.
Despite this slowdown, which the CBI puts down to weakness in productivity and slow wage growth, the 3 per cent overall forecast for 2014 has been maintained, as has the 2.7 per cent growth prediction for 2015.
The CBI blames a lack of business investment growth through the credit crunch for holding back production growth but says productivity is expected to improve in the longer term.
CBI director John Cridland says: “The UK’s recovery is on solid ground, with our quarterly growth on average outstripping G7 competitors over the last year. For the rest of this year, we expect growth to get onto a more even keel and the recovery to become further entrenched next year.
“Business investment has been growing better than expected so far this year, but it still has a lot of catching up to do to get back to its pre-crisis level.”