British Chambers of Commerce lowers growth forecast for 2018
A leading business group has downgraded its growth forecast for next year amid predictions that the UK economy is set to enter a more "subdued" period.
The British Chambers of Commerce (BCC) revised its forecast from 1.4% to 1.3% as consumer spending is expected to weaken.
The forecast for this year was changed from 1.1% to 1.4% following an improved outlook for trade and investment and stronger-than-expected levels of consumer spending.
Economic growth is expected to remain well below its long-term average into next year, said the BCC, adding that consumer spending should slow over the next few years.
Business investment is expected to fall by 0.5% in 2017 before recovering to grow by 0.2% in 2018 and 1% the year after, it was forecast.
Dr Adam Marshall, director general of the BCC, said: "Thanks to the hard work of businesses and the continued resilience of the redoubtable British consumer, the UK economy is likely to grow somewhat more strongly than we'd previously expected during 2017.
"Yet with several years of unspectacular growth ahead, coupled with inflationary pressures and the uncertain outcome of Brexit negotiations, it has never been more important to tackle the long-standing constraints that limit business confidence and growth here at home.
"Last week's Budget was a missed opportunity for the Government to double down on infrastructure improvements and support for international trade, and to lower the heavy up-front taxes and costs that undermine business investment."
Suren Thiru, head of economics at the BCC, added: "We have upgraded our growth forecast for 2017, driven by revisions to official GDP data and a stronger than expected end to 2016 for the UK economy.
"That said, the UK economy is still set to enter a more subdued period, with growth expected to remain materially below trend over the near term."
Liberal Democrat spokeswoman Susan Kramer said: "The economy has been propped up by consumer spending but this report makes clear that is due to fall as the public starts to feel the full force of the Brexit squeeze, with a falling pound and rising prices."