CBI Warns UK Growth to Remain Sluggish in 2018

Economic growth in the UK this year has been “timid” and will stay “steady but sluggish” in 2018, the CBI has said.

The business group says growth will be “tepid” amid Brexit uncertainty, while household spending will remain under pressure from squeezed wages.

The CBI expects subdued quarterly GDP growth of 0.3% until the end of 2019 – almost half the growth rate since 2013.

The body expects GDP to expand by 1.5% in both 2017 and next year, and fall to 1.3% in 2019.

It also argues that CPI inflation peaked at 3% in October, and should now ease gradually.

“After a timid 2017, UK economic growth is set to remain steady but sluggish, with less pep than we’ve seen over the past few years,” said Rain Newton-Smith, the CBI’s chief economist.

While domestic demand would remain soft, she said there were encouraging economic signs, including more support from exports, which have been buoyed by the lower pound and a resurgent global economy.

“The lacklustre rates of growth that we’re expecting come against the backdrop of several years of persistently weak productivity, which is pushing down on the UK’s supply potential,” added Ms Newton-Smith.

“The government’s newly announced Industrial Strategy can help address this challenge and boost living standards, but the recent White Paper is just a first step – consistency and determination is needed to make this a long-lasting success.”

The CBI said it was clear Brexit was affecting business investment plans, with companies having to prepare for a “no-deal” scenario.

via BBC

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza