A LEADING business group has wiped a whopping £43.8bn off its UK growth forecast up to the end of 2018, predicting that Brexit uncertainty will put the brakes on business investment.
In its first economic forecast since the EU referendum, the British Chambers of Commerce (BCC) downgraded its UK GDP growth outlook from 2.2 per cent to 1.8 per cent in 2016, from 2.3 per cent to 1.0 per cent in 2017, and from 2.4 per cent to 1.8 per cent in 2018.
“Although individual businesses continue to report strong trading conditions, the overall picture suggests a sharp slowdown in UK growth lies ahead,” said Dr Adam Marshall, acting director general at the BCC.
“Our forecast suggests that the UK is likely to avoid a recession, but with the health warning that businesses are still digesting the result of June’s EU referendum and the challenges and opportunities to come.”
A drastic slowdown in business growth could curtail demand for loans, which would have a marked effect on the UK’s P2P industry.
The BCC report called for the government to act to support business investment and confidence, by speeding up decisions on major infrastructure projects and overhauling taxes.
“They should start with the long list of business-boosting infrastructure projects that have been put on hold for far too long – including a firm decision on a new airport runway, new nuclear investment, and road and rail schemes,” added Marshall.
“We also need to see policies to encourage business investment, such as revisions to our outdated business rates system, which penalises companies for investment in plant and machinery, and hits firms before they have even turned over a penny.”