By 2019, UK economic growth would have slowed to 1.1 per cent: Report
The economic growth of British will drop to its slowest since 2009 in the year Britain is due to leave the European Union and will lag behind every major EU nation for the next handful of years, according to the latest forecast from the European Commission.
The report also states that this situation will remain unchanged even on the assumption that trade would not be disrupted by its departure from the EU.
The Commission slashed its forecast for economic growth in Britain for this year to 1.5 per cent from 1.8 per cent projected earlier this year and by 2019, UK growth would have reportedly slowed to 1.1 per cent, slower than Italy, Spain and Greece.
Talking about how investment growth is forecast to weaken in 2018, as many firms are likely to continue deferring investments in the face of uncertainty, the European Commission states: “Given the ongoing negotiation on the terms of the UK withdrawal from the EU, projections for 2019 are based on a purely technical assumption of status quo in terms of trading relations between the EU27 and the UK. This is for forecasting purposes only and has no bearing on the talks underway in the context of the Article 50 process.”
“Under this assumption, GDP growth is still expected to remain subdued at 1.1%. Lower consumer price inflation in 2019 is expected to support private consumption but this may be partially offset by a marginal increase in the household savings rate.”
The International Monetary Fund is expecting UK growth of 1.7 per cent this year, while the Organisation for Economic Cooperation and Development is forecasting growth of 1.6 per cent.