The British Chambers of Commerce (BCC) has today slightly downgraded its growth expectations for the UK economy, forecasting growth of just 1.2% in 2019 (down from 1.3%), which if realised would be the weakest growth in a decade. The BCC has also downgraded its growth forecast for 2020 to 1.3% (down from 1.5%) and published its first forecast for 2021 of 1.4% growth.

A weaker outlook for business investment and trade amid continued Brexit uncertainty and slower expected global economic growth were the main drivers behind the leading business group’s downgrades to its forecast for GDP growth in 2019 and 2020.

Key points in the forecast:

• Business investment is expected to contract by -1.0% in 2019, before returning to growth of 0.6% in 2020 and 1.1% in 2021

• Growth in household consumption for 2019 is expected to slow to 1.3%, before rising slightly to 1.4% in 2020 and 1.5% in 2021

• Average earnings growth is forecast to outstrip inflation over the period, with growth of 2.9%, 3.0%, and 3.1%, compared with inflation of 2.1%, 2.0%, and 1.9%

• UK official interest rates are expected to remain on hold throughout 2019, before increasing to 1.0% in Q2 2020. This is three quarters later than predicted in our Q4 forecast