Banking on greater economic growth

6th Feb 2017

The Bank of England (BoE) has once again raised its growth forecast. It expects the economy to grow 2% in this year, up from a forecast last November of 1.4%, which was itself an upgrade from the 0.8% forecast made in August.

The BoE’s heightened optimism over growth could prove good news for Britain’s service industry, which accounts for almost 80 per cent of the economy, according to the Office for National Statistics.

Britain’s vote in favour of Brexit last June prompted the BoE to drastically cut its growth forecast. But in its latest Quarterly Inflation Report, the Bank said: “Domestic demand has been stronger than expected in the past few months, and there have been relatively few signs of the slowdown in consumer spending that the committee had anticipated following the referendum.”

The BoE added that the higher spending and investment contained in the Chancellor’s Autumn Statement, along with stronger growth in the US and Europe, rising stock markets and the greater availability of credit for households, were other factors behind the Bank’s more optimistic outlook for Britain’s economy.

The improved growth forecast is further good news for the service industry, after The Institute of Customer Service research revealed that customer satisfaction rose for the fourth consecutive survey. The Institute’s UK Customer Satisfaction Index (UKCSI) found that customer satisfaction across all sectors rose 0.4 points to 77.4 on average.

But organisations cannot afford to rest on their laurels. The Institute’s data shows that 43% of consumers have purposely not bought a second product or service from an organisation if they’ve had a less-than-satisfactory experience.

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