Newspaper article The Journal (Newcastle, England)

Britain Faces Years of Slow Growth, Says Report

Newspaper article The Journal (Newcastle, England)

Britain Faces Years of Slow Growth, Says Report

Article excerpt

BRITAIN is facing three years of slow growth, rising unemployment and squeezed consumer spending, it has been claimed.

A report by influential think tank EY Item Club, which uses the Treasury's own models to make its forecasts, said the slump in sterling could prompt a "significant readjustment" of the UK economy away from consumer spending towards exports.

But the rebalancing of economic activity will be accompanied by three years of slow growth, it warned.

The Item Club expects GDP growth of 1.3% in 2017, down from an expected 2% in 2016, and just 1% in 2018.

Unemployment is forecast to creep up from 4.8% in the final quarter of last year to more than 6% by the end of 2018.

Mark Gregory, EY's chief economist, said: "Whatever the outcome of the Brexit negotiations, there are clear indications that the fall in the pound and the UK's exit from the EU will entail a change in the structure of the UK economy.

"The onus will be on businesses to adapt to the slowing domestic economy by seeking opportunities overseas. …

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