The U.K. government should increase their borrowing to finance infrastructure projects as a way to kick start economic recovery, the leading think tank National Institute for Economic and Social Research said Thursday.
The research institute raised their growth outlook for 2013 to 0.9 percent from the 0.7 percent expansion projected in February. The growth is forecast to rise further to 1.5 percent in 2014.
However, it said the economic outlook has been flat for two-and-a-half years and is unlikely to see above trend growth until 2015.
The think tank said it would be sensible for the government to take advantage of very low borrowing costs and invest around 2 percent of gross domestic product in infrastructure projects.
With the 10-year government bond yields below 2 percent, the Chancellor of Exchequer should borrow more, it observed.
The institute expects inflation to rise temporarily above 3 percent this year, before falling back to 2.3 percent on average, next year.
For comments and feedback contact: editorial@rttnews.com
Economic News
What parts of the world are seeing the best (and worst) economic performances lately? Click here to check out our Econ Scorecard and find out! See up-to-the-moment rankings for the best and worst performers in GDP, unemployment rate, inflation and much more.
May 01, 2026 15:54 ET Central banks dominated the economics news flow this week with almost all major ones announcing their latest policy decisions and many boosted expectations for a rate hike in June. In other news, several countries released the preliminary data for first quarter economic growth. In the U.S., comments by Fed Chair Jerome Powell were also in focus as his term ends this month.