The London-based National Institute of Economic and Social Research predicted Tuesday that the British economy will sail serenely though the current stock market turmoil and prosper “well into 2003”.
The economic think-tank’s bull forecast seemed more than a little anomalous alongside the latest plunge in share prices which in London yesterday hit a six year nadir. According to the NIESR, the UK economy will grow this year by 1.9% – marginally better than the 1.8% it predicted in April but well below the 2%-2.5% on which chancellor Gordon Brown based his April budget.
In an even rosier view of 2003, the NIESR envisages expansion of the national economy by 2.7%, aided by a recovery in world trade which will offset a decline in the domestic consumer sector.
A key factor in this optimism, says NIESR director Martin Weale, is the apparent resurgence of the British manufacturing sector aided by a weakening of sterling and its beneficial knock-on effect on exports.
Data sourced from: The Times (London); additional content by WARC staff