British economy to face prolonged weaker growth: EY Item Club Think Tank
Oct 16,London: Britain's economy is bound to face a "prolonged period" of weaker growth as consumer spending slows and business curbs investment, according to a report on Monday.
According to the EY Item Club think tank,the British economy will grow by 1.9% this year, it expects that performance to fizzle out as inflation rises. The economy's stability since June's Brexit vote was "deceptive", the report said, as, It expects inflation to jump to 2.6% next year before easing back to 1.8% in 2018. That will cause growth in consumer spending to slow from an expected 2.5% this year to 0.5% in 2017 and 0.9% the year after, the EY said,
Business investment is also forecast to fall due to uncertainty surrounding Britain's future trading relationship with the EU, dropping 1.5% this year and more than 2% in 2017.
EY predicts that the impact of weaker consumer spending and falling investment will cause UK GDP growth to drop sharply to 0.8% next year, before expanding to 1.4% in 2018.
The Oslo Time/Agencies