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Abu Dhabi, UAEMonday 25 June 2018

Britain should prepare for subdued economic growth, warns business lobby

The risks associated with Brexit mean that the ‘lukewarm’ projections could actually be worse than predicted

The voice of business in the UK, the CBI, has warned of slowing economic growth. Jason Alden/Bloomberg
The voice of business in the UK, the CBI, has warned of slowing economic growth. Jason Alden/Bloomberg

Growth in the UK economy will continue to be “lukewarm” for some time and may even weaken in coming years, according to the Confederation of British Industry, the association that represents the majority of the country’s businesses.

In its latest outlook, the CBI sees that there will be expansion of the economy by 1.5 percent next year and 1.3 percent in 2019, which would be the worst annual performance since 2009, when the economy shrank.

It also said the downside risks to its projections are high, as they assume Brexit goes smoothly, with the UK reaching agreement on a transition deal with the European Union early next year. That would come into effect when it leaves the bloc in March 2019.

While domestic demand will stay “soft” over the period, there is support for the economy from net trade, the CBI said. That view is supported by a survey Friday showing the domestic manufacturing growth was at its strongest in more than four years in November.