UK economy to slow down, says European Commission

ABB robotic arms work on the body parts of Mini cars as they pass along a section of automated production line at the BMW Mini car production plant in Oxford.Image copyright
AFP

The UK economy will slow down sharply over the next couple of years says the European Commission.

Its latest forecast says the UK economy will grow by just 1.5% this year and by 1.2% in 2018, compared to 2% last year.

The Commission says the slowdown is prompted by uncertainty following last June’s Brexit vote in the UK.

By contrast, the eurozone of 19 countries is predicted to grow faster than the UK, by 1.6% this year and 1.8% the next.

However the latest forecasts by the Commission, for both the UK and the eurozone, represent an improvement on its previous one made last November, which suggested that the UK would grow by just 1% this year.

Explaining its view, the Commission said: “Business investment is likely to be adversely affected by persisting uncertainty while private consumption growth is projected to weaken as growth in real disposable income declines.”

Inflation is also predicted to rise this year in the eurozone, reaching an annual rate of 1.%, up from just 0.2% in 2016.

The view of the Commission on the UK was shared recently by the National Institute of Economic and Social Research (NIESR).

Earlier this month it also predicted an economic slowdown in the UK, with the country growing by 1.7% this year and 1.9% in 2018.

Facebook

Get the Facebook Likebox Slider Pro for WordPress