The growth rate will slow to 1.5% this year, continuing to lose momentum in 2018 as it drops to 1.0%, according to investment services firm Moody’s.
The forecast from ratings agency Standard and Poor’s is even less optimistic, predicting a downturn of 1.4% in 2017 to drop to 0.9% in 2018, amid mounting economic pressures.
A combination of business uncertainty due to Brexit, a squeeze on households due to slow wage growth, and the jump in the consumer price index and rate of inflation will all affect the slowdown.
Figures published on 11 July showed that UK household expenditure fell for the second month in a row in June, rounding off the weakest quarter for expenditure since Q3 2013.
“Over the medium term, growth prospects would likely be materially weaker if the UK were to fail to reach a new trade arrangement with the EU that allows it good access to the single market,” the report from Moody’s stated.
Last week, the EU’s chief Brexit negotiator Michel Barnier warned Theresa May’s government that the UK cannot be “half-in and half-out of the single market.”