World Economy

UK Economy to Slow Down

UK Economy  to Slow Down UK Economy  to Slow Down

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, BBC reported.

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.

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.

The commission also said that global GDP growth is thought to have hit its low point last year and will strengthen this year and next, with growth outside the EU projected to pick up gradually from 3.2% in 2016 to 3.7% in 2017 and 3.9% in 2018.

The report forecast falling business investment and rising inflation in the UK over the period, while growth in disposable incomes and household consumption is expected to weaken.

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