CBI predicts UK economy will grow 1.2% in 2013

Meanwhile, its estimate for 2014 has been increased from two per cent to 2.3 per cent.

However, it also claimed that despite these changes, Britain is still far from making a sustainable recovery, as the rebalancing of the economy is taking longer than previously thought.

John Cridland, director-general of the CBI, said the economy has started to gain momentum and confidence is gradually building, but it is still early days.

He added: "We need to see a full-blown rebalancing of our economy, with stronger business investment and trade, before we can call [it] a sustainable recovery."

Mr Cridland remarked the CBI is hoping that signs of this will begin to emerge in 2014, as the situation begins to improve in the eurozone.

The company revealed household spending is set to increase for the seventh quarter in a row, but business investment is lagging 20 per cent below its pre-recession peak, with the CBI predicting this will see a further 2.8 per cent decline in 2013 before it bounces back to 7.3 per cent next year.

According to Mr Cridland, the government needs to back British businesses and help them break into new export markets to sell their products and services around the world.

The CBI - which represents 240,000 companies in the UK - said a growth in exports will be cancelled out by more imports as the economic situation in the country improves, but the forward guidance proposed by Mr Carney should inspire confidence.

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