The UK economy will grow faster
than expected this year this year, but Britain could face a tougher time
in the long-term amid “tough and prolonged” Brexit negotiations with
the European Union, according to a report from the influential EY Item
Club.
The organisation has pencilled in UK GDP growth of 1.3pc in 2017 - an
substantial upgrade on earlier forecasts of 0.8pc - but expects this to
slow to 1pc in 2018, before picking up to 1.4pc in 2019 and 1.8pc in
2020.
These forecasts are based on assumptions the the UK will trade with
the EU under World Trade Organisation rules, rather than privileged
access to the single market, and that negotiations will be “tough and
prone to setback”.
The good news, however, is that the weak pound should provide a
helpful boost to the country’s export industry and multi-national
companies, many of whom generate income in foreign currencies, such as
US dollars.
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