British Chambers of Commerce downgrades GDP growthStaff Writer | September 13, 2016
The British Chambers of Commerce (BCC) has downgraded its UK GDP growth forecast, from 2.2% to 1.8% in 2016, from 2.3% to 1.0% in 2017, and from 2.4% to 1.8% in 2018.
Britain Weaker consumer spending and a large fall in investment
The uncertainty surrounding the UK’s long-term political arrangements with the EU, as well as the timeline over which any actions will take place, are expected to dampen growth prospects towards the end of 2016 and over 2017.
Despite these issues, the UK is expected to skirt with, but avoid, recession. The post-referendum slide in sterling is expected to help improve the UK’s net trade position.
The downgrades to the BCC’s forecast for UK GDP growth imply that the UK economy will be £43.8 billion smaller at the end of the forecast period than previously predicted.
Business investment is expected to fall by 2.2% in 2016 and by 3.4% in 2017. The slight pick-up in business investment in 2018 (+2.0%) reflects a ‘levelling-off’ from the declines recorded in 2016 and 2017. This compares to our previous forecast of a 4.5% increase in 2016 and rises of 7.4% in 2017 and 2018.
Export growth is expected to drop to 2.3% in 2016, from 4.8% in 2015, but grow slowly to 3% in 2017 and 4% in 2018. ■