THE winner of the general election will have an economic honeymoon as growth forecasts have been boosted for the rest of the year.
The UK is expected to grow at fastest pace in three years after the election, according to the Confederation of British Industry.
The business lobby group upgraded its forecasts for the year and now expects the economy to grow by 1 per cent this year compared to its previous forecasts of 0.8 per cent.
Next year the economy is expected to grow by 1.9 per cent, better than the CBI’s previous forecast of 1.6 per cent.
The economy will be helped by falling inflation, which has squeezed businesses and households and lower interest rates.
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However, the CBI warned that Britain’s worklessness crisis, largely driven by record numbers of long term sickness, will continue to be a drag on the economy.
Markets are betting the Bank of England will resist lowering rates from the current 5.25 per cent until after the election.
The institution has cancelled all public statements but will still make a decision on interest rates on June 20.
Last month an IMF report predicted that the British economy will grow faster than all our big European neighbours.
Chancellor Jeremy Hunt welcomed the report from the Washington-based organisation which said the UK economy will now grow by 0.7 per cent - up from 0.5 per cent.
Mr Hunt said: “Today’s report clearly shows that independent international economists agree that the UK economy has turned a corner and is on course for a soft landing.”
