According to the CBI (www.bi.org.uk), the “tepid growth” seen in 2017 is set to continue, with the UK business group forecasting that GDP will grow at a rate of 1.5% in 2017, 1.5% in 2018 and 1.3% in 2019.

Rain Newton-Smith, the CBI’s chief economist, said: “UK economic growth is set to remain steady but sluggish, with less pep than we’ve seen over the past few years.

“We expect domestic demand to remain soft, with household spending remaining under pressure from squeezed real wages and Brexit uncertainty weighing on business investment. That said, we should see more support from net exports, buoyed by the lower pound and a resurgent global economy.


“The lacklustre rates of growth that we’re expecting come against the backdrop of several years of persistently weak productivity. The Government’s newly announced Industrial Strategy can help address this challenge, but the recent White Paper is just a first step — consistency and determination are needed to make this strategy a long-lasting success.”


Following the Bank of England interest-rate rise in November, the CBI expects three more rate rises, each of ‘25 basis points’ — in Q3 2018, and in Q2 and Q3 2019 — still leaving interest rates relatively low at 1.25%.

In its forecast, the CBI also says it expects Consumer Price Inflation to have peaked at 3% in October 2017 and thereafter to ease gradually, “although it does remain above the Monetary Policy Committee’s 2% target throughout our forecast.

“However, with only a lukewarm pick-up in wage growth expected, living standards are set to stay under pressure.

“The global economy has been growing strongly, and the CBI expects its momentum to remain solid, providing a supportive backdrop for economic growth in the UK.

“Indeed, the CBI expects the global economy to grow by 3.6% in 2017, 3.7% in 2018 and 3.4% in 2019 — on a purchasing-power parity basis. Furthermore, the CBI has upgraded its forecast for the euro-zone growth, with the recovery across several countries having picked up pace.”