“UK economy over the worst, but struggling to accelerate” warns EY’s ITEM Club
The UK economy is over the worst, but still struggling somewhat to accelerate compared to its global counterparts and will remain “stuck in the middle lane” in 2018 as well as over the medium term, suggests the latest forecast from the EY ITEM Club. The Winter Forecast notes that UK GDP growth in 2017 was 1.8%, which was better than widely expected. However, this nevertheless compares unfavourably with 2017 GDP growth of 2.5% for the Eurozone, 2.3% for the US and an estimated 3.0% on the global stage.
The momentum from 2017, an improving outlook for consumer spending and the increased likelihood of a near-term Brexit transition arrangement are expected to support UK growth this year.
The EY ITEM Club has nudged up its UK GDP forecasts for 2018 to 1.7%, rising from the 1.4% it was predicting in its Autumn Forecast during October last year.
However, further out, the UK’s limited productivity performance and ongoing Brexit and political uncertainties will see the UK achieve only ‘mid-range growth’.
The EY ITEM Club has slightly reduced its GDP growth projections for 2019 to 1.7% (down from 1.8%), 1.9% for 2020 (down from 2.0%) and 2.0% for 2021 (down from 2.2%).