A leading economic think tank has halved its forecast for growth in the UK economy next year following the Brexit vote. However, the Organisation for Economic Cooperation and Development does not expect the impact of the vote to leave the European Union to be as marked as it had feared during the current year. The Paris-based organisation expects the rate of growth in the UK’s gross domestic product to slow to one per cent this year, compared with a forecast of two per cent before the referendum in June. The OECD has increased its forecast for growth in the current year to 1.8 per cent, from 1.7 per cent in June, when it warned a leave vote would have a substantial impact on the UK. The economy grew by 2.2 per cent last year. The organisation said: “For 2016, GDP growth has been supported by a strong performance prior to the referendum, even though business investment contracted. Developments to date are broadly consistent with the more moderate scenarios set out prior to the referendum and reflect prompt action by the Bank of England in August.” It added: “Uncertainty about the future path of policy and the reaction of the economy remains very high and risks remain to the downside. In the longer term, the UK’s future trading arrangement with the EU and other partners will be critical to its economic prospects.”
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