Danny McCance 18 Sep 2018 12:40pm

UK GDP growth for 2018 cut to 1.1%

The growth forecast has been downgraded from 1.3% to 1.1% for 2018, while the forecast for 2019 has been lowered from 1.4% to 1.3%

This means that by 2020 the UK will have had its “second weakest decade of average annual growth on record,” according to the British Chambers of Commerce (BCC).

The downgrades have been driven partly by a weakened trade outlook, with export growth forecasts dropping from 2.8% to 1.7% for 2018.

Brexit and slower growth in key markets means trade is expected to make a “negative contribution to GDP growth over the forecast period.”

At the end of August, international trade secretary Liam Fox stated that the UK had the potential to be a “21st century exporting superpower”.

Investment growth forecasts have also been lowered, falling from the previously forecasted 1.8% to 1.4% for 2018, with recent uncertainty hurting investment intentions.

“Brexit uncertainty continues to weigh heavily on many firms, as most of the practical questions facing trading businesses remain unanswered,” said Adam Marshall, director general of BCC.

He said it is the lack of precision over negotiating the ongoing relationship with the EU that is affecting the expectations of UK investment and trade.

“The drag effect on investment and trade would intensify in the event of a ‘messy’ and disorderly Brexit,” Marshall called for “clarity, precision and results at pace.”

“At a time of massive change and uncertainty, business would not forgive a timid ‘business as usual’ Autumn Budget, nor tax hikes that make UK companies less competitive around the world,” he added.

At the beginning of September, research found that Brexit uncertainty had undermined UK business confidence, causing it to drop to its lowest level since May 2017.