Growth of 2% for each of the next five years

News Article - 23 May 2012
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The economy will grow by at least 2 per cent for each of the next five years, according to a recent speech from the Chancellor. Economic growth will hit 1.8 per cent in 2010, followed by 2.1 per cent, 2.6 per cent, 2.9 per cent, 2.8 percent and 2.7 per cent respectively for each year until 2015.

Employment markets will also improve steadily with growth expected in every year of the current parliament's tenure. The Office of Budget Responsibility (OBR) predicts unemployment to drop from its current level of 8.1 per cent to six per cent by 2015.

The Chancellor also highlighted the OBR's prediction that the country was unlikely to experience a double dip recession, a fear that has been widespread in the business community.

Commenting on the revelations, the chancellor said: "Our decisive actions have proved to the world that Britain can live within her means."

Industry reactions have been mixed. KPMG Chief Economist Andrew Smith pointed out the figures and general positive analysis was based in some regard on two assumptions made by the Government:

"Even though growth this year has been revised up, the theory that private sector demand will strengthen as the Government retrenches is still to be put the test. Despite downward revisions to income growth, the OBR's assumption is that the household sector is learning to live with high debt levels and will be prepared to save less to support spending."

For businesses, these figures suggest the economic situation is improving and firms will no doubt want to take advantage of newly created opportunities over the next few years. Competition will increase as firms attempt to regain positions held before the recession took hold, making efficiency of operations an essential requirement for future success.

Access business and accounting software can help; it has been designed to provide essential metrics to senior managers so that key decisions are made on the back of sound financial data. By making decisions that contribute to the best financial scenario, companies improve profitability and internal efficiency. This will enable businesses to make the most of increased demand and capitalise on new opportunities as the economy continues to improve.

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