UK economy faces slowdown on political turmoil, Brexit — CBI

LONDON: Britain’s economy will slow in the coming years, the CBI business lobby warned Tuesday, blaming domestic political turmoil – and the impact of Brexit one day after EU divorce talks began.

The economy will expand by 1.6 per cent this year before slowing to 1.4 per cent in 2018, according to upgraded forecasts from the Confederation of British Industry, after 1.8-per cent growth in 2016.

The CBI, which is Britain’s biggest employers’ grouping, also cited fallout from this month’s inconclusive general election.

“The UK is expected to see steady but subdued economic growth over the next couple of years,” it said in a statement.

“The economy continues to face headwinds, with ongoing political uncertainty and Brexit negotiations, which will require careful navigation by business and the government.”

The latest growth forecasts marked upgrades from prior guidance of 1.3 per cent and 1.1 per cent, for 2017 and 2018 respectively.

“Growth should be steady, if restrained, over the next couple of years as the pace of the economy shifts down a gear,” added CBI director-general Carolyn Fairbairn.

“While the country’s exporters should emerge as a real catalyst of growth, rising inflation and stubbornly low wage growth mean that people are already starting to feel the pinch.

“So, after a frantic period in Westminster, this is the time for a renewed focus on the economic fundamentals of this country.” — AFP

Britain’s Chancellor of the Exchequer Philip Hammond delivers his re-scheduled speech to the Bankers and Merchants of the City of London, during a breakfast event at The Mansion House in London on June 20. — AFP photo