The British Chambers of Commerce (BCC) has raised its forecast for the UK’s economic growth this year from 1.1 per cent to 1.4 per cent. However, it also warns that the UK will be among the worst performing G7 economies until 2020.
The BCC raised its forecast for 2018 as there were stronger than expected levels of consumer spending. On the on the back of this, the organisation also upped the figures for 2019 from 1.3 per cent to 1.5 per cent and set its first forecast for 2020 at 1.6 per cent growth.
However, despite these increases, the BCC believes that UK gross domestic product (GDP) growth is set to remain “well below” the historical average throughout the forecast period.
A spokesman for the groups said that, while many individual businesses are doing well, the inescapable conclusion from the forecast is that the UK economy should be performing better than it is.
He added that while strong global growth has buoyed the UK’s export demand, where performance is expected to remain robust, the BCC still has “serious concerns” about the potential for further growth at home when the performance of key trading partners slows.
According to the BCC, sustained skills and labour shortages are also a real issue, with businesses reporting significant difficulties recruiting and retaining the people they need.
However, if a concerted effort were made to get the basics right on connectivity, infrastructure, training, immigration and business costs, the BCC is sure that there would be “significant productivity improvements” and further business investment.