Econ­omy set to ‘shift down a gear’, says CBI

The Scotsman - - News Digest - By ALAN JONES

Eco­nomic growth is set to be “sub­dued” over the next few years amid on­go­ing po­lit­i­cal un­cer­tainty and Brexit talks, a lead­ing busi­ness group is warn­ing.

The CBI said a slower pace of growth is ex­pected to per­sist, while busi­ness in­vest­ment will fall back next year.

House­hold spend­ing growth is pre­dicted to slow this year and in 2018, while wage rises will re­main be­low in­fla­tion this year and broadly in line next year, said the CBI.

The group fore­cast 1.6 per cent eco­nomic growth for 2017 and 1.4 per cent next year.

Carolyn Fair­bairn, the CBI’S di­rec­tor gen­eral, said: “Growth should be steady, if re­strained, over the next cou­ple of years as the pace of the econ­omy shifts down a gear.

“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.”

She added: “Tighter purse strings mean slower house­hold spend­ing growth and un­cer­tainty is likely to weigh on the minds of those mak- 0 CBI di­rec­tor gen­eral Carolyn Fair­bairn was ‘re­strained’ ing ma­jor in­vest­ment de­ci­sions. So, af­ter a fran­tic pe­riod in West­min­ster, this is the time for a re­newed fo­cus on the eco­nomic fun­da­men­tals of this coun­try.

“Above all, the new govern­ment has the op­por­tu­nity to sig­nal loudly and clearly that Britain is a great place to do busi­ness, re­lent­lessly fo­cus­ing on in­vest­ing in in­fra­struc­ture, in­no­va­tion and skills na­tion­wide, while de­liv­er­ing a sen­si­ble and com­pet­i­tive tax and reg­u­la­tory en­vi­ron­ment.”

Rain New­ton-smith, the CBI’S chief econ­o­mist, added that growth will be slower in the years ahead as liv­ing stan­dards are hit by ris­ing in­fla­tion.

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