The British Chambers of Commerce slightly downgraded UK growth forecasts for 2018 to 1.3%, from 1.4%. For 2019, growth projection was downgraded to 1.4%, from 1.5%. And it said that, if realized, 2018 would be the weakest year since 2009. And it warned that the economy is in a ” torpor, with uncertainties around Brexit, interest rate rises, and international developments such as a possible trade war and rising oil prices” all having an impact.
BCC said in a statement that “the downgrades have been largely driven by a more lacklustre outlook for consumer spending, business investment and trade”. And, growth in real wages is not expected to “translate into materially stronger spending over the forecast horizon”. And “weak productivity” would continue to limit wage growth. Household finances will remain “stretched amid historically low household savings and high debt levels.”
Business investment growth is expected to slow sharply to 0.9% in 2018, down from 2.4% in 2019 on Brexit uncertainties. Next trade position is also expected to “weaken over the next few years”. Services growth is projected to slow to 1.2% in 2018, weakest since 2010.
