New forecasts from the Centre for Economics and Business Research (CEBR) predict the UK economy overall will grow by just 1.3 per cent in 2017, a substantial downward revision from their April forecast of 1.7 per cent growth.
The forecast for 2018 has also been revised down to 1.2 per cent, indicating that the political uncertainty is likely to lead to an economic slowdown this year and next via lower business investment and weaker consumer spending.
The CEBR assessment is however less downbeat on the Brexit outcome. The CEBR expects GDP to expand by 1.6 per cent in 2019 and by 1.9 per cent in 2020. This marks an upward revision from the pre-election forecasts of 1.5 per cent and 1.8 per cent reflecting an increased expectation of a deal with the rest of the EU on Brexit, leading to a rebound in confidence and stronger growth after 2018.
Nina Skero, Head of Macroeconomics at the CEBR, says: “Our data on confidence show that the newly created political uncertainty is highly likely to weigh on growth in the short term. This means that we now do not expect an interest rate rise until the end of 2018.
“But we now think that a deal with the EU on Brexit is more likely than previously seemed which will benefit both the UK and the remaining members of the EU. We have therefore revised up our forecasts for growth for the period from 2019 onwards.”
For information about how we can assist by putting processes in place to lessen the impact of Brexit on your business, contact Steve Govey or your usual Beavis Morgan Partner. Our SME business experts at Beavis Morgan are available to structure your business with cashflow and profit forecasting to measure performance and maximise opportunities. We work to a pre-determined plan, to help you avoid any nasty surprises.