Affected in 2009 by a recession more intense than other European countries under the effect of a sharp drop in household consumption and investment, the British economy is currently distinguished by the strength of renewed growth (1.8% in 2013).
Forecast at +2.7% in 2014 by Coface, it could be as dynamic as that of the United States and exceed Germany (2%).
While the change from a service economy towards a diversified economy is gradual, the industrial renewal is underway. Despite several persistent weaknesses, Coface puts the country risk assessment of the UK at A2.
British growth has surprised by its strength and has set priority on investment: This remarkable and early exit from the crisis is the fruit of measures implemented to counter soaring debt, the drop in exports and an overdeveloped financial sector. The ultra-expansionist monetary policy carried out by the ECB since the second half of 2012 and the injection of £375 bn by the Bank of England into the economy have been able to restore confidence to households and companies.
In 2013, the upturn in consumption was buoyed by a drop in unemployment, measures aiming to boost construction and an easing of credit conditions, particularly for SMEs. In 2014, investment should take up the reigns from consumption. Its good performance should enable a higher potential growth, after a slight slowdown expected in 2015 (growth estimated at 2.1%) following a probable tightening of monetary policy.
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Source: Coface Press Release
