Britain’s economy is expected to grow at the slowest pace since 2009 this year, an economic think-tank has warned.
Stalling wage growth, higher living costs and dwindling consumer spending power mean the economy looks set to grow by just 0.8 per cent this year, the Centre for Economics and Business Research said.
By the end of the year, UK inflation is expected to reach around 2.7 per cent, the findings added, compared to the current rate of 1.2 per cent.
Sluggish: Britain’s economy is expected to grow at the slowest pace since 2009 this year, the Cebr said
With sluggish economic growth predicted for this year, the Cebr said it expects the economy to grow by 1.1 per cent in 2018 and 1.8 per cent in 2019.
‘Business investment is expected to suffer as Brexit-related uncertainty hurts confidence’, the Cebr said.
The think-tank claims business investment could fall by 3.9 per cent this year.
Nina Skero, managing economist at the Cebr, said the UK was poised for a ‘difficult year.’
She added: ‘In 2017, new challenges such as rising inflation will combine with existing ones including weak wage and productivity growth.
‘A simultaneous consumer and business investment slowdown will leave the economy without two key growth drivers, but there are some reasons for cautious optimism.’
Inflation will be driven up by rising import costs caused by the weak pound and higher oil prices, the report said.
Rising: Inflation, currently at 1.2 per cent, will be driven up by rising import costs caused by the weak pound and higher oil prices, the Cebr said
While painting a gloomy picture for Britain’s overall economic growth in the next few years, the findings suggest the weak pound will discourage imports, giving the country’s national producers a chance to prosper.
On the subject of employment, the Cebr said unemployment levels will reach 5.3 per cent this year, compared to an average of 6.6 per cent from 2006 to 2016.
In its last round of employment data, the Office for National Statistics said UK unemployment fell to 4.8 per cent, its lowest since September 2005.
On Tuesday, the ONS saidaverage household disposable income levels have risen by £600 in the past year, with ‘income inequality’ between the highest and lowest earners narrowing.
Action: Prime Minister Theresa May is expected to invoke Article 50 by the end of March
Earlier this week, a group of MPs from the Treasury Select Committee questioned bosses from financial powerhouses, including HSBC and the London Stock Exchange, about Britain’s exit from the UK.
Xavier Rolet, chief executive of the London Stock Exchange, said thousands of UK finance sector jobs remain at risk if the Government fails to form a clear plan for post-Brexit operations.
Economists, major companies, certain politicians and bodies like the Bank of England have all come under fire for their negative predictions over Britain’s post-Brexit economy.
Prime Minister Theresa May is expected to invoke Article 50 by the end of March.
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Higher living costs and stalling wages mean Britain’s economy will grow just 0.8% this year – the slowest pace since financial crisis, economists claim have 488 words, post on www.dailymail.co.uk at 2017-01-11 14:01:31. This is cached page on WBNews. If you want remove this page, please contact us.