Newspaper article The Evening Standard (London, England)

'Fog of Brexit' Puts the Brake on Growth; WORST ECONOMIC FORECAST FOR DECADE BANK WARNS OVER NO-DEAL UNCERTAINTY No-Deal Would Cripple UK in Longer Term, CBI Warns

Newspaper article The Evening Standard (London, England)

'Fog of Brexit' Puts the Brake on Growth; WORST ECONOMIC FORECAST FOR DECADE BANK WARNS OVER NO-DEAL UNCERTAINTY No-Deal Would Cripple UK in Longer Term, CBI Warns

Article excerpt

Byline: Jonathan Prynn and Nicholas Cecil

THE Bank of England today slashed its forecasts for growth to the slowest pace since the last recession as it warned the "fog of Brexit" was damaging the economy.

Its latest quarterly inflation report predicted that GDP will only increase by 1.2 per cent in 2019, a huge downgrade from the previous 1.7 per cent projected only three months ago.

Growth has not been weaker since 2009 when Britain was still in the grip of the recession triggered by the financial crisis. The report, which sent the pound tumbling, said that growth "appears to have slowed in 2018 Q4 [fourth quarter], and is expected to remain subdued over much of 2019, at lower rates than were projected in November."

Although this was partly down to a weaker global economy "it is also likely to reflect the effect of heightened uncertainty around the UK's withdrawal from the EU, which has intensified since November." Governor Mark Carney said: "The fog of Brexit is causing short-term volatility Continued on Page 4 Continued from Page 1 in the economic data and more fundamentally creating a series of tensions in the economy." The Bank's gloomy projection came just two days after a survey said growth in the dominant services sector almost ground to a halt since the start of the year.

Shadow chancellor John McDonnell said: "The Government must be stronger in averting a no-deal Brexit, and act now to protect the economy."

Liberal Democrat leader Sir Vince Cable said: "Sadly the UK is bumping along the bottom rather than bursting with the entrepreneurial energy the Brexiteers promised us."

The Bank also revealed that its key Monetary Policy Committee has voted 9-0 to keep its interest rate at 0.75 per cent. Business leaders today issued their strongest warning yet on the "crippling" damage that a no-deal exit would wreak on Britain. …

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