Slower consumer spending, and political and economic uncertainties around Brexit are set to lead to a slowdown in economic growth for 2017, PwC has predicted.
A report by the accountancy firm forecasts UK GDP growth will slow to 1.5% in 2017, and 1.4% in 2018 – down from 1.8% in 2016 – as households begin to feel the squeeze on budgets following the Brexit vote in June 2016.
The report notes that growth is expected to continue at a lower level, as inflation impacts spending power. So far, high borrowing levels have offset the impacts of this, and the weakness of sterling is also potentially proving beneficial for exports.
Commenting on the results, Jamie Hawsworth, chief economist for PwC, said: “There are still downside risks relating to Brexit, but there are also upside possibilities if negotiations go smoothly and the recent eurozone economic recovery continues. We expect the UK to suffer a moderate slowdown, not a recession, but businesses should be monitoring this and making contingency plans.”