The British economy, which narrowly emerged from a recession in the last three months of 2009, will grow at a moderate rate this year, a think-tank predicted today.
The National Institute of Economic and Social Research (NIESR) forecast in a report that UK gross domestic product (GDP) will expand by 1.1% in 2010, followed by 2% in 2011. The latest forecast compared with NIESR's previous growth predictions of 1.3% and 1.5% respectively.
'Despite the disappointingly slow start to the recovery in the fourth quarter of 2009, we are expecting the economy to grow rather faster in the first three months of 2010 and beyond,' NIESR said in the report.
'But the expansion will be at a moderate tempo, both this year and next,' it added.
Official data had revealed last week that the battered UK economy grew by just 0.1% in the fourth quarter of 2009, ending the country's deepest recession in modern history. However, the anaemic growth rate disappointed many economists because market expectations had been for stronger expansion of 0.4%.
The NIESR also forecast today that the country's labour market would worsen in the coming years. 'We expect unemployment to carry on rising over the next two years, from 7.8% in late 2009 to 9.2% in 2011,' the report predicted.
'The jobless count will peak at 2.9 million in the third quarter of 2011,' it added.
The NIESR report was published the day before an interest rate decision from the Bank of England.
