The UK’s real GDP growth is projected to slow to around 1.6 per cent in 2016 and 0.6 per cent in 2017, according to PricewaterhouseCoopers, but should gradually recover thereafter as the initial shock from the Brexit vote fades.
The professional services group’s analysis draws on research conducted in March for the Confederation of British Industry, updated to take account of the latest available economic data up to early July.
It predicted quarter-on-quarter GDP growth could fall to close to zero in late 2016 and early 2017, but is then projected to recover gradually later in 2017 as the immediate post-referendum shock starts to wane.
The UK would avoid recession in this scenario, although uncertainties around this central view are significant, with alternative scenarios showing GDP growth in 2017 of anywhere between +1.5 per cent and -1 per cent.
