25 Jun 2018
The British Chambers of Commerce (BCC) have downgraded their overall expectations for the UK economy for 2018 and 2019 in their latest Quarterly Economic Forecast. GDP growth for 2018 is at 1.3%, down on the previous forecast of 1.4%. If realised, this would be the weakest calendar year growth since 2009.
The main findings include:
-UK economic outlook weakness
-Business investment and net trade’s contribution to growth remain limited
-Service sector output growth expected to slow to eight-year low
Suren Thiru, Head of Economics at BCC, commented: “The downgrades to our forecast reflect a broad-based weakening in the outlook for key areas of the UK economy including consumer spending, business investment and trade. Consumer spending is expected to be more subdued over the near term from a combination of sluggish real wage growth and stretched household finances.
“Trading conditions for UK exporters are expected to become more challenging over the forecast period as growth in key markets start to moderate. While Brexit uncertainty and the weakness in sterling have weighed on overall UK growth, it is the failure to deal with the longstanding structural issues from weak productivity to the deep imbalances in the UK economy that continue to undermine the UK’s growth potential.
“The risks to the outlook are on the downside. A messy departure from the EU would likely slow UK GDP growth further over the medium term. The prospect of an escalating trade war is now a key downside risk to our forecast as it could mean much weaker export and business investment growth than implied by the current forecast.”
To view the full forecast click here.