Business group revises up Britain's economic growth forecast for 2019

Tuesday, 2019-06-18 10:59:31
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The British Chambers of Commerce (BCC) revises up the country's economic growth forecast for 2019 to 1.3 percent from 1.2 percent.
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The British Chambers of Commerce (BCC) has revised up the country's economic growth forecast for 2019 to 1.3 percent from 1.2 percent.

According to a report released Monday (June 17) by the BCC, the economic growth forecast for 2019 was estimated at 1.3 percent, up from the previous read of 1.2 percent, driven by exceptionally rapid stockpiling amid Brexit uncertainty early this year.

However, forecasts for 2020 and 2021 were revised down from 1.3 percent to 1.0 percent and from 1.4 percent to 1.2 percent respectively.

The immediate boost is foreseen to come "at the cost of more subdued growth in 2020 and 2021 as the unwinding of historically-high inventory levels, coupled with weaker business investment, weigh on economic activity," said the BCC.

The BCC said that "exchange rate volatility, Brexit uncertainty and a subdued global economy, weaken trading conditions for UK exporters."

The group predicted that Britain will avoid a messy and disorderly withdrawal from the European Union (EU). It urged the next prime minister to roll out a clear roadmap to prevent a further slowdown in the economy.

Suren Thiru, head of economics at the BCC, said: "The revisions to our forecast suggest that the UK economy is likely to remain on a disappointingly subdued growth path for some time to come."

"The downward pressure on business activity and investment intentions from the unwinding of stocks is likely to be exacerbated somewhat by increasing cost pressures and Brexit uncertainty, slowing overall economic growth across the forecast period," Thiru said.

Thiru said a disorderly exit from the EU remains the main downside risk to Britain's economic outlook.

"While politicians are distracted, businesses are left with no choice but to try and prepare for the unwanted possibility of leaving the European Union on 31st October without a deal and transition period," said Adam Marshall, director general of the BCC.

"Business communities expect the next prime minister to quickly find a sensible and pragmatic way forward to avoid a messy and disorderly Brexit," Marshall said.

Xinhua