Manufacturing to lead growth as UK economy stutters says CBI
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Manufacturing will boost output by 4% in 2011 as the wider UK economy stutters, the CBI has predicted.
Overall economic growth will be "patchy and slow", the CBI said.
The predicted GDP growth rate for 2011 has been downgraded from 1.8% to 1.7% by the business organisation.
However manufacturing was leading the growth and had helped offset a dip in construction output last quarter, the CBI said.
The sector will be further buoyed by a surge in export business over the next seven months, according to the CBI forecast.
John Cridland, CBI director-general, said: "Although there are a number of risks to the UK's economic outlook, we continue to expect that the recovery will make further headway this year and next, but the pace will be sluggish."
Cridland added: "But there are some brighter spots in the forecast. Global economic conditions remain upbeat, and we expect to see a stronger performance by UK exporters"
The expected 4% rise in manufacturing output is a 0.4% increase on 2010 levels."
Manufacturers will face ongoing inflationary pressures according to the CBI forecast.
Modest interest rate rises could arrive by the end of the autumn according to the business organisation.
Ian McCafferty, CBI chief economic adviser said: "Of particular concern are rising commodity prices, which are putting more intense upward pressure on inflation. By acting sooner rather than later, the Bank of England will be able to keep inflation expectations under control,"
