The Confederation of British Industry projects UK growth to lag well behind peers in 2018 and 2019. UK real GDP growth is forecast to be at 1.4% in 2018 and 1.3% in 2019 only. Eurozone growth is forecast to be at 2.2% in 2019 and 1.7% in 2019. US growth is forecast to be at 2.% in 2018 and 2.3% in 2019.
Though, UK would still be better than Japan at 1.1% growth in both 2018 and 2019. India is projected to stay strong with 7.3% growth in 2018 and 7.1% in 2019. China’s growth is expected to slow notably to 6.3% in 2018 and 5.8% in 2019.
On monetary policy, CBI expects 25bps BoE hike in Q3 2018, Q1 2019 and Q4 2019. Inflation is projected to slow to 2.1% at the end of 2019.
CBI Chief Economist Rain Newton-Smith said that there is no disguising that UK is in “slow lane” for growth. And, “productivity weakness is a structural challenge for the UK economy and a drag on living standards.” She also urged firms to work with the Government to “nurture a pro-enterprise environment to drive growth and create wealth.” Also, “business and government must work together to drive competitiveness at home so firms can make the most of opportunities overseas” after Brexit.
Full release here.
