The British Chambers of Commerce has lowered its forecast for U.K. growth until 2020. The B.C.C. issued a warning stating that the British economy is to face its second-weakest decade.
UK Growth by 2020
The British Chambers of Commerce (B.C.C.) lowered its forecast for growth in the U.K. economy. At the same time, it cautioned that by 2020, the United Kingdom will be experiencing the second-weakest economic decade in its history.
The B.C.C.’s GDP growth forecast for this year was downgraded from 1.3 percent to 1.1 percent. The same trend is expected to continue next year as the B.C.C. lowered its earlier growth prediction of 1.4 percent to 1.3 percent. In 2020, its economic growth rate remained the same at 1.6 percent.
Reduced Trade and Investment Expectations
The B.C.C. downgrades are the result of a lower expectation in both trade and investment in the U.K. Growth for exporters is slowing due to uncertainty regarding Brexit and reduced key market growth, said the B.C.C. forecast. Furthermore, the increased costs associated with doing business in the United Kingdom, and the continued indecision regarding the U.K.’s trade relationship with the E.U.’s single market are predicted to further throttle investments into British business.
Brexit Uncertainty Pains
The lack of clarity regarding Brexit is holding back the U.K. economy. “Despite strong performances by some firms, the UK economy as a whole is set to grow at a snail’s pace,” said BCC director general, Dr. Adam Marshall. “Brexit uncertainty continues to weigh heavily on many firms, as most of the practical questions facing trading businesses remain unanswered.”
Marshall went on to point out that expectations for both the U.K. and the E.U.’s future investment and export growth are being held back by the uncertainty regarding the post-Brexit relationship between the two. “The lack of precision on the nature of the UK’s future relationship with the EU is lowering expectations for both business investment and export growth,” said Marshall. “The drag effect on investment and trade would intensify in the event of a ‘messy’ and disorderly Brexit.”
The BCC director general also added that companies require greater clarity from the Brexit negotiations. In upcoming weeks, businesses need faster precision and results, he said.