Economic growth forecasts downgraded amid consumer spending concerns
July 5, 2017

The Centre for Economics and Business Research has predicted that political uncertainty will lead to a slowdown in the economy and has subsequently downgraded Britain’s growth prospects for the next two years. The Centre outlined that business investment and consumer spending would dry up, largely due to rising inflation after the fall in the pound since the vote to leave the European Union and slowing wage growth. Growth in the economy has been revised down this year to 1.3 per cent, from its 1.7 per cent prediction in April, and growth for next year to 1.2 per cent from 1.6 per cent. However, Nina Skero, head of macroeconomics, said: “We think a deal with the EU on Brexit is more likely than previously seemed, which will benefit both the UK and the remaining members of the EU. We have therefore revised up our forecasts for growth for the period from 2019 onwards.” Consumers, who have been driving growth in the economy since the financial crisis, are suffering the longest decline in their spending power since the 1970s, official figures showed last week.

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