GDP growth is forecast to slow from 1.3% for this year to 1.0% in 2020 - the weakest outturn since 2009 – according to the latest economic forecast from the British Chambers of Commerce (BCC).
Although this is a slight upgrade on BCC’s previous forecast of 0.8%, it indicates that by the end of 2020 the UK economy will have experienced its second weakest decade of average annual GDP growth on record.
Furthermore, the UK’s net trade position is forecast to be weaker over the period under review than in the previous forecast. A deteriorating outlook for the global economy, growing global trade tensions and continued uncertainty on the UK’s future relationship with the EU are likely to stifle export sales, the BCC argues.
It expects export growth of 0.3% in 2019, 1.1% in 2020 and 1.4% in 2021, weaker compared to its previous forecasts of 1.3%, 1.3% and 1.5%
Head of Economics Suren Thiru said: “Our forecast points to several years of anaemic activity in the UK economy unless decisive action is taken. An expansion in government spending is likely to give a nudge to the UK economy, whoever wins the General Election. However, a slowing global economy and unrelenting political uncertainty are expected to weaken business investment, trade and consumer spending, limiting the UK’s growth trajectory.”
BCC Director General Dr Adam Marshall warned that, while the needs of business have been glossed over in the General Election campaign, this cannot be allowed to continue.
“As long as businesses are held back by Brexit uncertainty, high up-front costs, skills gaps, and poor infrastructure, we can expect growth to be mediocre, at best,” he said.
Last reviewed 10 December 2019