New signs the economy has stopped flat-lining

CBI expects improved growth in the UK over the next 18 months after success of first quarter

Britain's foremost business lobby group argues today that the UK's stagnant economy is finally "moving from flat to growth". In its latest report, the Confederation of British Industry says that it expects GDP to expand by 1 per cent in 2013, followed by 2 per cent growth next year.

The Office for National Statistics has estimated that the economy expanded by 0.3 per cent in the first quarter of the year, meaning that the UK avoided a triple dip recession. "Our latest survey data suggests that the momentum shown in the first quarter will continue into the next" said the CBI's director of economics, Stephen Gifford. "We continue to expect UK economic growth to strengthen and become more broad-based over this year and next."

The Bank of England will also publish its quarterly growth and inflation forecasts this week, with City analysts expecting the central bank to unveil a rare upward revision on the back of the better recent survey data.

Further good news came today as Lloyds TSB's report into business activity across the English regions recorded its strongest result for eight months.

The CBI expects unemployment to rise slightly this year to 2.58 million, before steadily falling over 2014. Likewise, it expects employment to fall marginally and then to rise steadily.

However, the business group sees CPI inflation rising briefly above 3 per cent in June and remaining above the Bank of England's official 2 per cent target rate until at least the end of 2014.

The report says that inflation and weak wage growth will keep pressure on household finances. Nevertheless it expects household consumption, aided by the Chancellor's increase in the tax free personal allowance, to rise slightly this year and next. It expects the household savings rate to fall from 7.1 per cent to 5.4 per cent as people feel more secure about their finances.

The CBI said that it expects the eurozone, which accounts for half of UK trade, to emerge from recession in the second half of the year, contributing to a 5 per cent jump in exports in 2014. It sees fixed capital investment rebounding by 5.7 per cent next year, led by the manufacturing sector.

The latest BDO Business Trends survey, also published today, reports that its optimism index for the dominant services sector improved in April from 93.2 to 94.9, although this is still short of the 95 level that signals growth.

Unveiling the CBI report, the director-general John Cridland said that the Coalition should do more to support growth despite this year's expected pickup. "The Government needs to pick up the baton and deliver on promises to get finance to firms, cut red tape and help drive up exports" he said.

The Lloyds TSB Regional Purchasing Managers' Index reached it highest level since August 2012 scoring 52.2 in April. Any score above 50 represents growth and this is the sixth consecutive month in which it has done so.

Growth in April was led by Yorkshire & Humberside and the East Midlands with London dropping back from first place to third. David Oldfield, managing director for small and medium business banking at Lloyds said: "Last month's rebound in regional business activity gives us an early indication that growth and confidence have continued into the second quarter of 2013.

"The most encouraging development was the rise in new business orders across all nine English regions."

The Banksy image in Folkestone before it was vandalised
Life and Style

Sales of the tablet are set to fall again, say analysts

football West Brom vs Man Utd match report: Blind grabs point, but away form a problem for Van Gaal
Arts and Entertainment
Gotham is coming to UK shores this autumn
tvGotham, episode 2, review
Arts and Entertainment
Bloom Time: Mira Sorvino
tvMira Sorvino on leaving movie roles for 'The Intruders'
First woman: Valentina Tereshkova
peopleNASA guinea pig Kate Greene thinks it might fly
Brian Harvey turned up at Downing Street today demanding to speak to the Prime Minister

Met Police confirm there was a 'minor disturbance' and that no-one was arrested

Arts and Entertainment
George Lucas poses with a group of Star Wars-inspired Disney characters at Disney's Hollywood Studios in 2010

George Lucas criticises the major Hollywood film studios

Chris Grayling, Justice Secretary: 'There are pressures which we are facing but there is not a crisis'

Does Chris Grayling realise what a vague concept he is dealing with?

ebooksAn unforgettable anthology of contemporary reportage
Life and Style
A street vendor in Mexico City sells Dorilocos, which are topped with carrot, jimaca, cucumber, peanuts, pork rinds, spices and hot sauce
food + drink

Trend which requires crisps, a fork and a strong stomach is sweeping Mexico's streets

Life and Style
The charity Sands reports that 11 babies are stillborn everyday in the UK
lifeEleven babies are stillborn every day in the UK, yet no one speaks about this silent tragedy
Blackpool is expected to become one of the first places to introduce the Government’s controversial new Public Space Protection Orders (PSPOs)

Parties threaten resort's image as a family destination

Life and Style
Northern soul mecca the Wigan Casino
fashionGone are the punks, casuals, new romantics, ravers, skaters, crusties. Now all kids look the same
Life and Style

I Am Bread could actually be a challenging and nuanced title

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Customer Service Executive / Inbound Customer Service Agent

£18 - 23k + Benefits: Guru Careers: We are seeking a Customer Service Executiv...

ASP.NET Web Developer / .NET Developer

£60 - 65k + Benefits: Guru Careers: We are seeking a ASP.NET Web Developer / ....

Operational Risk Manager - Asset Management

£60,000 - £80,000: Saxton Leigh: Our client is an leading Asset Manager based...

Project Coordinator - 12 month contract

£27000 - £32000 Per Annum: Clearwater People Solutions Ltd: Our large charity ...

Day In a Page

Two super-sized ships have cruised into British waters, but how big can these behemoths get?

Super-sized ships: How big can they get?

Two of the largest vessels in the world cruised into UK waters last week
British doctors on brink of 'cure' for paralysis with spinal cord treatment

British doctors on brink of cure for paralysis

Sufferers can now be offered the possibility of cure thanks to a revolutionary implant of regenerative cells
Ranked seventh in world’s best tourist cities - not London, or Edinburgh, but Salisbury

Salisbury ranked seventh in world’s best tourist cities

The city is home to one of the four surviving copies of the Magna Carta, along with the world’s oldest mechanical clock
Let's talk about loss

We need to talk about loss

Secrecy and silence surround stillbirth
Will there be an all-female mission to Mars?

Will there be an all-female mission to Mars?

Women may be better suited to space travel than men are
Oscar Pistorius sentencing: The athlete's wealth and notoriety have provoked a long overdue debate on South African prisons

'They poured water on, then electrified me...'

If Oscar Pistorius is sent to jail, his experience will not be that of other inmates
James Wharton: The former Guard now fighting discrimination against gay soldiers

The former Guard now fighting discrimination against gay soldiers

Life after the Army has brought new battles for the LGBT activist James Wharton
Ebola in the US: Panic over the virus threatens to infect President Obama's midterms

Panic over Ebola threatens to infect the midterms

Just one person has died, yet November's elections may be affected by what Republicans call 'Obama's Katrina', says Rupert Cornwell
Premier League coaches join the RSC to swap the tricks of their trades

Darling, you were fabulous! But offside...

Premier League coaches are joining the RSC to learn acting skills, and in turn they will teach its actors to play football. Nick Clark finds out why
How to dress with authority: Kirsty Wark and Camila Batmanghelidjh discuss the changing role of fashion in women's workwear

How to dress with authority

Kirsty Wark and Camila Batmanghelidjh discuss the changing role of fashion in women's workwear
New book on Joy Division's Ian Curtis sheds new light on the life of the late singer

New book on Ian Curtis sheds fresh light on the life of the late singer

'Joy Division were making art... Ian was for real' says author Jon Savage
Sean Harris: A rare interview with British acting's secret weapon

Sean Harris: A rare interview with British acting's secret weapon

The Bafta-winner talks Hollywood, being branded a psycho, and how Barbra Streisand is his true inspiration
Tim Minchin, interview: The musician, comedian and world's favourite ginger is on scorching form

Tim Minchin interview

For a no-holds-barred comedian who is scathing about woolly thinking and oppressive religiosity, he is surprisingly gentle in person
Boris Johnson's boozing won't win the puritan vote

Boris's boozing won't win the puritan vote

Many of us Brits still disapprove of conspicuous consumption – it's the way we were raised, says DJ Taylor
Ash frontman Tim Wheeler reveals how he came to terms with his father's dementia

Tim Wheeler: Alzheimer's, memories and my dad

Wheeler's dad suffered from Alzheimer's for three years. When he died, there was only one way the Ash frontman knew how to respond: with a heartfelt solo album