Economic growth outlook for next two years is better, but ‘still weak’, says BCC
The economy will grow faster than previously expected both this year and next, thanks to stronger consumer spending – but the performance will still be disappointing, according to the latest forecast by the British Chambers of Commerce.
The business group projects growth of 1.4 per cent this year, up from its previous estimate of just 1.1 per cent. For 2019 – the year of Brexit – it foresees growth of 1.5 per cent, up from 1.3 per cent previously. Underlying this forecast, the BCC sees consumer spending rising by 1.2 per cent this year, and 1.4 per cent in 2019. Business investment is seen as growing by 1.1 per cent this year and 1.3 per cent in 2019.
The GDP forecast for this year is slightly weaker than the 1.5 per cent pencilled in by the Office for Budget Responsibility alongside the Spring Statement last week. But the BCC’s 2019 forecast is stronger than the OBR’s 1.3 per cent forecast.
Despite the overall upgrade, Dr Adam Marshall, the BCC’s director general, emphasised the fact that the economy was still underperforming. “While many individual businesses are doing well, the inescapable conclusion from our forecast is that the economy as a whole should be performing better than it is, given robust and sustained global growth,” he said.
“Despite the upward revisions, our latest forecasts suggest that the is set for an extended period of sub-par growth – a damning indictment of the state of the economy given the rapidly improving global growth outlook,” added Suren Thiru, the BCC’s head of economics, stressing that the outlook was predicated on a “relatively smooth” Brexit.
Anything less than that would mean a much more severe economic hit to the UK.