OECD’s UK forecast is ‘unnecessarily gloomy’ – ITEM Club
Andrew Goodwin, senior economic advisor to the EY ITEM Club, comments:
“The OECD’s forecast for the UK looks unnecessarily gloomy. Having reached a low point in the autumn, most of the business surveys and official monthly series data have picked up nicely, culminating in this morning’s index of services. The data appears to be consistent with GDP growth of 0.3-0.4% in Q1, a long way from the recession forecast by the OECD. Output would have needed to have fallen significantly in February and March for there to be any chance of another negative quarter.
“Admittedly prospects for Q2 don’t look quite as good, but that’s simply because of the extra bank holiday for the Diamond Jubilee. Once that has passed we should see a gradual improvement in prospects, which is unlikely to be a million miles away from the OBR’s forecast of 0.8% growth for 2012 as a whole.”