LONDON, Aug. 2 (Xinhua) -- British economic growth is forecast to grow by 1.7 percent this year and by 1.9 percent next year, according to information released by a major British think tank here on Wednesday.
The National Institute of Economic and Social Research (NIESR) forecast that the annual consumer price index (CPI) would peak at 3.0 percent in the last quarter of this year before easing back to the target rate of 2.0 percent in the final quarter of 2019.
NIESR predicted that the British fiscal deficit would be eliminated in 2022 and the debt-to-gross domestic product (GDP) ratio would peak in 2018 and 2019.
Meanwhile, the forecast for world GDP growth in 2017 has been revised up to 3.6 percent, which would be the fastest growth in six years. Growth projections for 2018 and the medium term are unchanged, at 3.6 and 3.4 percent, respectively, said the report.
"In the euro area, stronger economic performance, together with reduced political uncertainty, provides an opportunity for action to complete the monetary union and reduce economic imbalances," Jagjit Chadha, director of NIESR, said.
To avoid jeopardising the recovery, central banks in advanced economies will have to manage policy normalization with particular caution, he added.
The Bank of England interest rate will hike from the second quarter of 2019 to the first quarter of next year. This will be the first policy rate increase in nearly 11 years, the report said.
"This rate increase should not be seen as a tightening in policy, but instead as a modest withdrawal of some of the additional stimulus that was injected into the economy after the 2016 EU referendum," Jagjit Chadha noted.
Major uncertainties remain about U.S. fiscal, trade, and regulatory policies, which carry upside and downside risks for growth, according to the report.
"More broadly, economic recovery remains fragile and could be derailed by policy mistakes," said the report.
A single purchase
