JANAURY 20142

Economic Outlook

OXFORD ECONOMICS’ FORECAST

2012 2013 2014 2015 2016 2017

The UK Outlook

Domestic Demand 1.2 1.8 2.2 2.2 2.3 2.2

Private Consumption 1.5 2.2 2.2 2.2 2.3 2.5

Fixed Investment 0.7 -2.2 6.5 6.3 6.5 5.9

Stockbuilding (% of GDP) 0.3 0.9 0.6 0.5 0.5 0.5

Government Consumption 1.6 0.4 0.8 -0.3 -0.9 -1.5

Exports of Goods and Services 1.1 1.1 3.1 4.0 5.2 5.3

Imports of Goods and Services 3.1 0.8 1.9 3.1 4.0 4.2

GDP 0.3 1.9 2.6 2.4 2.6 2.6

Industrial Production -2.5 0.1 2.8 1.7 1.6 1.5

Claimant unemployment (Q4 mn) 1.55 1.25 1.13 1.08 1.05 1.03

Headline RPI (Q4) 3.1 2.6 2.8 3.0 3.6 3.7

RPIX (Q4) 3.0 2.7 2.8 2.7 2.8 3.1

CPI (Q4) 2.7 2.1 1.8 1.7 1.7 2.0

Current Balance (% of GDP) -3.7 -3.6 -2.8 -2.2 -1.8 -1.5

Government Budget (% of GDP) -6.3 -5.7 -5.2 -4.3 -3.2 -2.0

Short-Term Interest Rates (%) 0.84 0.50 0.53 0.66 1.57 2.61

Long-Term Interest Rates (%) 1.91 2.45 3.06 3.25 3.54 3.99

Exchange Rate (vs US$) 1.59 1.56 1.60 1.56 1.55 1.53

Exchange Rate (Euro per £) 1.23 1.18 1.23 1.25 1.27 1.27

The World Outlook

World GDP (2005 PPP) 3.1 2.9 3.6 3.9 4.0 4.1

US 2.8 1.9 3.1 3.2 3.0 2.9

Japan 1.4 1.7 1.8 1.4 0.9 1.1

Eurozone -0.6 -0.4 0.9 1.4 1.5 1.6

World Trade 1.5 2.1 4.5 5.7 5.6 5.4

(UK export-weighted)

The Oxford Economics Forecast(Annual percentage changes unless specified)