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City predicts faster growth for Britain - The Times

LEADING City forecasters are revising up their growth predictions for Britain, in spite of the Bank of England’s downbeat tone last week. In the first significant bout of upward revisions since 2007, some forecasters believe that growth next year will be higher than the Treasury’s 1.25% prediction.

This weekend new forecasts from Credit Suisse are for growth in Britain next year of 1.8%, up from 1%.

The firm is also optimistic about recovery in Europe, despite figures on Friday showing a 2.5% slide in eurozone gross domestic product in the first quarter. Its new prediction for the eurozone is for 1.5% growth next year, up from 1%.

“The first phase of the recovery is likely to be driven by an end of the inventory rundown and a possible inventory build-up,” said Robert Barrie, an economist at Credit Suisse. “That will buy some time – possibly a year or so – for those who need to rebuild their balance sheets. In the course of next year we would expect final demand to take over.”