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Is the EY Item Club right to predict that UK growth will significantly accelerate in 2015? (City A.M.)

    Head of Economic Research Adam Memon wrote for a City A.M. debate on "Is the EY Item Club right to predict that UK growth will significantly accelerate in 2015?".

    To read the full debate, visit the City A.M. website

    "While there are plenty of reasons to be positive about UK growth in 2015, there are still significant risks to this optimistic picture. With the UK’s current account deficit now at 6 per cent of GDP, our economy is suffering from the stagnation in the Eurozone.

    The inability of our major trading partners to revive their economies, combined with another bout of turbulence, could place downward pressure on UK exports. Furthermore, if productivity growth fails to recover as expected, then output, real wages and deficit reduction will all disappoint.

    In addition, political uncertainty may exert a large negative influence on investment in two ways. First, an incoming Labour administration that campaigned against austerity could, when faced with the realities of office, quickly undergo a meltdown. Second, the promise of higher taxes on incomes and profits alongside new regulatory policies could place unwelcome costs on many businesses."

    To read the full debate, visit the City A.M. website

    Date added: Tuesday 20th January 2015