Despite upgrading its growth expectations for the UK economy, the British Chambers of Commerce (BCC) has given a bleak assessment of the future.
UK GDP growth is set to remain well below the historical average for this year and through to 2020, the BCC claims, with its latest forecast implying that the UK will remain among the worst performing economies in the G7 until at least the end of this decade.
Available at http://bit.ly/2FVnhgf, the BCC’s Quarterly Economic Forecast for the first quarter of this year (Q1) predicts that GDP will grow from 1.1% to 1.4% in 2018 and from 1.3% to 1.5% in 2019, while the first forecast for 2020 anticipates GDP growth of 1.6%.
The more positive forecasts are based, the BCC explains, on levels of consumer spending being slightly stronger than expected.
Productivity is expected to improve marginally between now and 2020, it says, but will remain subdued due to deep-rooted problems in the UK economy.
It is the need to tackle those problems — which include skills shortages and a lack of investment in infrastructure — that the Government must address BCC Director General Dr Adam Marshall stresses.
“While many individual businesses are doing well,” he explained, “the inescapable conclusion from our forecast is that the UK economy as a whole should be performing better than it is, given robust and sustained global growth.”
With the Government distracted by Brexit, it will require a concerted effort to get the basics right on connectivity, infrastructure, training, immigration, procurement and business costs, the BCC notes.
Doing so would however “give rise to a wave of investment and significant productivity improvements”.
The forecast also predicts that average earnings will rise by 2.5% in 2018, by 2.9% in 2019 and by 3.0% in 2020.