Written by: Keith Tully
Date: Tuesday 14th February, 2017
Growth in the UK economy will slow down considerably over the course of this year and next, according to the European Commission.
Although the commission is still expecting the British economy to expand over the next two years, it is convinced that the effect of the UK’s decision to withdraw from the European Union will be to dampen growth quite significantly.
The UK economy grew by 2 per cent in 2016 but the commission expects to see that pace of growth cool to 1.5 per cent in 2017 and to 1.2 per cent in 2018.
During the same two year period, the commission’s latest forecasts are that the 19 economies that make up the Eurozone will grow steadily faster, by 1.6 per cent this year and by 1.8 per cent next year.
The commission has made clear its view that Brexit will mean “business investment is likely to be adversely affected by persisting uncertainty” and that private consumption growth will “weaken as growth in real disposable income declines”.
Speaking after publishing his organisation’s latest set of economic predications, economic and financial affairs commissioner Pierre Moscovici said the “the UK’s vote to leave the EU continues to pose significant downside risk” both for Britain and for all the Eurozone economies.
However, he also noted that the “European economy has proven resilient to the numerous shocks it has experienced over the past year”.
“Growth is holding up and unemployment and deficits are heading lower. Yet with uncertainty at such high levels, it’s more important than ever that we use all policy tools to support growth,” he said.
Earlier this month a study by Ipsos Mori revealed that a majority of bosses leading big businesses around the UK feel that the result of the Brexit referendum vote in June last year has already had some negative impact on their operations.
More than a hundred people from the country’s largest 500 companies were polled for their views on the subject and 58 per cent said the Brexit situation had taken a negative toll on their businesses in recent months.
23rd October 2017 The British Chambers of Commerce (BCC) has called on the government to freeze business rates in order to provide a boost to the competitiveness and productivity of UK companies.
12th October 2017 The impact of Brexit and the process of Britain departing from the European Union is likely to push up rates of insolvency among businesses throughout the UK.
11th October 2017 Financial losses and persistent problems with cash flows has led the civil engineering business Owen Pugh to enter administration.
2nd October 2017 Monarch Airlines has become insolvent and ceased trading as a result of “mounting cost pressures and increasingly competitive market conditions,” administrators have confirmed.
29th September 2017 The Bank of England governor Mark Carney has given a clear indication that he expects the base rate of interest in the UK to rise in the near future.
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