Economic growth is set to slow over the next 2 years, according to the British Chambers of Commerce (BCC).
The business group has upgraded GDP growth from 1.8% to 2.1% for 2016, following stronger economic progression in Q3.
GDP growth for 2017 has also been upgraded from 1.0% to 1.1%.
However, 2018 growth has been downgraded from 1.8% to 1.4%. Continued uncertainty around EU negotiations and higher inflation are expected to dampen growth, impacting consumer spending and business investment.
Further points from the forecast:
- higher inflation will rise over the 2% target set by the Bank of England in 2017
- household consumption will slow from 2.7% in 2016 to 0.6 in 2017 and 2018
- business investment is expected to fall by -0.8% in 2016, -2.1% in 2017 and -0.3% in 2018
- export growth is to slow to 2.6% in 2016 and 2.3% in 2017, before increasing to 2.9% in 2018.
Dr Adam Marshall, director general of BCC, said:
“While some firms see significant opportunities over the coming months, many others now see increasing uncertainty, which is weighing on their investment expectations and forward confidence. Lower sterling and rising inflation are now starting to affect business communities and consumers across the UK.”
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