The UK economy is expected to grow steadily, but at a subdued rate in 2018.
According to the latest forecast by the Confederation of British Industry (CBI), GDP will grow 1.5% next year, and by 1.3% in 2019.
Quarterly GDP growth is predicted to remain at 0.3% until the end of 2019. This is almost half the average growth rate since 2013.
Squeezed household incomes are expected to reduce spending, while uncertainty surrounding Brexit will impact on business investment.
However, the forecast also suggests that strong growth in the global economy, combined with a lower pound, will provide exporting opportunities for businesses.
The government’s recently announced Industrial Strategy will also aim to address productivity and growth issues in the UK.
Rain Newton-Smith, chief economist at the CBI, said:
“It is already clear Brexit is affecting business investment plans, and companies are having to prepare for a ‘no-deal’ scenario.
“Therefore, it is vital progress is made in negotiations with Brussels, particularly in providing more clarity around transitional arrangements, so we can start to shape our new relationship with the EU.”
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