BRITISH Chambers of Commerce has cut its growth forecasts for the UK economy sharply – believing prospects have been dampened significantly because of the Brexit vote and warning of “turbulent” times.
It is projecting sharp falls in business investment this year and in 2017, amid the protracted uncertainty in the wake of the UK electorate’s June 23 vote to leave the European Union.
The business organisation has reduced its UK growth forecast for next year to just one per cent, from 2.3 per cent. It has cut its projection for this year from 2.2 per cent to 1.8 per cent.
It warns the UK economy will “skirt with recession”, and projects growth of just 0.1 per cent in the third and fourth quarters of this year. It predicts that recession will be avoided, but warns that this projection comes with a “health warning”.
British Chambers said: "Our forecast suggests that the UK is likely to avoid a recession, but with the health warning that businesses are still digesting the result of June's EU referendum and the challenges and opportunities to come.
"The value of sterling, the shape of future trade relationships, the status of EU nationals in the UK workforce, and other factors will all influence business confidence over the coming quarters.”
British Chambers is now forecasting a 2.2 per cent fall in UK business investment this year, followed by a 3.4 per cent tumble in 2017.
Suren Thiru, head of economics at British Chambers, said: “The downgrades to our growth forecast confirm that the UK economy is set to enter a turbulent period, with growth expected to weaken materially in the near term.”
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