UK GDP 'to grow 1% in 2010'

Gross domestic product (GDP) will grow by one per cent this year before accelerating slightly in 2011 and 2012, according to a new forecast from the National Institute of Economic and Social Research (NIESR).

The body said slow expansion in 2009 will be the result of a drop in the pace of destocking, while growth in 2011 and 2012 - which is expected to be two per cent and 2.2 per cent respectively - is likely to be ’below trend’.

Those using their personal wealth to make investments will see consumer spending increase by 0.3 per cent in 2010, with growth set to be ’subdued’ during the following 12 months.

And NIESR, which has been operating for over 60 years, also called for a deficit reduction worth two per cent of GDP to be implemented once a ’sustained recovery’ is taking place.

This will help ’create fiscal headroom’ that can be used in the event of another economic crisis, it explained.ADNFCR-2318-ID-19753101-ADNFCR