The British economy is expected to grow at its slowest rate since the recession, as businesses stand to suffer from Brexit-related uncertainty.
The UK economy will grow by just 0.8 per cent this year, which is the lowest level since 2009 when it contracted by 4.3 per cent, according to figures from the Centre for Economics and Business Research.
This growth rate will speed up only marginally in 2018 and 2019, and is expected to hit 1.1 per cent and 1.8 per cent respectively.
Cebr also said it expects the Bank of England to keep rates on hold until at least mid-2018.
Nina Skero, managing economist at Cebr, said new challenges, such as rising inflation, will combine with existing ones, including weak wage and productivity growth.
She warned this mixture will make 2017 a “difficult year”.
This will bring an end to the consumer spending boom which has been driving economic growth Nina SkeroBusinesses’ investment intentions have dampened recently, and CEBR pointed out that many firms will take a ‘wait and see’ approach as Brexit negotiations unfold.
The research provider predicted that this will lead to a 3.9 per cent drop in business investment next year.
Research published last year found a third of British businesses had ditched their investment plans in light of the EU referendum.
Cebr also expects inflation to hit 2.7 per cent this year, driven by higher import costs and rising oil prices.
Ms Skero said: “In combination with lacklustre wage growth, this will bring an end to the consumer spending boom which has been driving economic growth over the past few years.”
However, she said there are some reasons for “cautious optimism”.
This includes the unemployment rate and the UK’s trade prospects, with the weaker pound discouraging imports, while making those UK exports which compete primarily on price more attractive to foreign buyers.
