CBI: House prices to inflate by 9.5pc
This marks a strong increase from 2013, when property prices increased by 3.5%.
The CBI expects economic growth for the rest of 2014 to slow to 0.7% in Q3 and 0.6% in Q4 after growth of 0.8% in Q1 and Q2, owing to uncertainties over Scottish independence.
Cridland said: “UK businesses are still facing a significant amount of uncertainty, with the forthcoming Scottish referendum, the general election next year and the debate on Britain’s place in the European Union.
“In the wider world, geopolitical risks are growing, with heightened tensions in Ukraine and the Middle East.
“This brings with it the possibility of upward pressure on commodity prices and on inflation, and also increased global financial market instability.
“Growth is firmly on track, but with the external risk register rising, as we go into the party conference season, businesses need politicians to focus on the UK’s long-term economic security, not just on winning the political race.”
The CBI predicted interest rates to stay at 0.5% until Q1 2015 owing to slow wage growth and CPI inflation staying under 2%.
It also anticipates wages to grow by 1.0% in 2014 and 2.4% in 2015, while the unemployment rate is expected to average 6.4% this year before falling to 5.9% in 2015.