Global slowdown to hit UK economic growth and Osborne's surplus plan, says BCC
A global slowdown is set to hamper growth in the UK and knock George Osborne’s plans for a budget surplus by 2020 off course, the British Chamber of Commerce (BCC) has said.
The trade body downgraded its forecasts for GDP growth from 2.5% to 2.2% for 2016, and from 2.5% to 2.3% for 2017. Its first prediction for 2018 put growth that year at 2.4%.
The BCC blamed the downward shift on a “weaker than expected growth across most areas of the economy, reflecting a general global slowdown”.
Its acting director general Dr Adam Marshall said: “Our forecast should stand as a wake-up call. The UK’s economic performance is reasonably good when measured against our main competitors, but it’s only mediocre when compared against long-term trends.
Marshall, appointed since the resignation of John Longworth over a row about his views on the European Union, went on: “Our trade deficit remains too high, and is not forecast to improve substantially over the next three years.”
The recalculations come just days before Chancellor George Osborne will present his latest budget. The BCC suggested Osborne’s goal for achieving a surplus in the 2019/2020 financial year was “slightly too ambitious” and that it would likely take another year to hit that target.
Marshall said the organisation wants to see the Chancellor “bring forward road, rail and digital infrastructure projects that would help UK companies do more business”, as well as avoid burdening firms with more costs and taxes in the House of Commons next week.
The BCC also said that an interest rate rise would come later than it initially expected. It now anticipates an increase to 0.75% in the fourth quarter of this year.
