Brexit followed by Political Issues to Downgrade Growth Forecast of UK in 2020

  • Published Month : Monday, 02 Dec 2019 12:00 pm

Official figures have shown that Britain’s economy is growing at the weakest annual pace since 2010, and industry leaders see little or no improvement in 2020, even if Prime Minister Boris Johnson wins re-election and secures a Brexit divorce deal by a Jan. 31 deadline.

Brexit pressures and political uncertainty have prompted the Confederation of British Industry and a manufacturing trade body, Make UK, to downgrade their growth forecasts for next year.

Official figures have shown that Britain’s economy is growing at the weakest annual pace since 2010, and industry leaders see little or no improvement in 2020, even if Prime Minister Boris Johnson wins re-election and secures a Brexit divorce deal by a Jan. 31 deadline.

The CBI on Monday predicted economic growth of 1.3% this year and 1.2% in 2020, followed by a pick-up to 1.8% in 2021, assuming Johnson reaches a trade deal with the EU that leads to no tariffs and little divergence from EU rules.

“Alongside perennial Brexit uncertainty, (businesses) are also contending with softer global demand,” CBI chief economist Rain Newton-Smith said.

Back in July, the CBI forecast growth of 1.4% this year and 1.5% next.

Make UK halved its forecast for manufacturing growth next year to 0.3% from 0.6%, though it kept its forecast for growth in the overall economy in 2020 unchanged at 1.4%, up from 1.3% this year.

“Export orders have increased slightly this quarter, indicating greater confidence from foreign customers about purchasing UK goods as concerns about an end of year no-deal Brexit fade,” Make UK’s chief executive, Stephen Phipson, said.

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