UK Economy To Slow Down In 2017 and 2018, Report Concludes
A drop in value of the pound sterling and the impact of Brexit means consumer price inflation is likely to rise
The UK economy is expected to slow down both this year and next, according to a report by The National Institute of Economic and Social Research (NIESR).
Despite 2% growth in 2016, including 0.6% in Q4, NIESR’s forecast predicts the UK economy will slow to just 1.7% in 2017 and 1.9% in 2018.
A drop in value of the pound sterling versus international currencies, and the impact of Brexit means consumer price inflation is likely to rise – which spells potentially good news for businesses but bad news for consumers.
In global terms, the world economy is expected to grow at a faster rate in the next couple of years, with the annual growth rate forecast to rise from 3% in 2016 to 3.1% in 2017, and then to 3.5% in 2018.
Simon Kirby, head of macroeconomic modelling and forecasting at NIESR said:
“Robust consumer spending growth was behind the economic momentum of 2016. Consumers face significant headwinds this year and next. Most notably, the pass through from the recent depreciation of sterling to consumer prices is expected to erode the purchasing power of households this year and next.”