The British Chambers of Commerce (BCC) (www.britishchambers.org.uk) has raised its growth forecast but warns that the UK will be among the worst performing G7 economies until 2020.

It raised its GDP forecast for 2018 from 1.1% to 1.4% and its forecast for 2019 from 1.3% to 1.5%.

Its first forecast for 2020 is for 1.6% growth. The increases reflect slightly stronger than expected consumer spending.

The BCC also says that the UK’s export performance is expected to remain robust on the back of strong global growth.

“However, with imports also likely to continue to grow, the contribution of net trade to the UK’s GDP growth over the near term is likely to be limited, particularly with little evidence of a sterling boost to the UK’s overall net trade position; and despite the upgrades, UK GDP growth is set to remain well below the historical average throughout the forecast period”.

BCC director general Adam Marshall added: “While many individual businesses are doing well, the inescapable conclusion from our forecast is that the UK economy as a whole should be performing better than it is, given robust and sustained global growth.

"Although strong global conditions have given the UK a bit of a boost through higher export demand in recent months, we have serious concerns about the potential for further growth here at home when the performance of key trading partners slows.

“Sustained skills and labour shortages are also a real issue, with businesses reporting significant difficulties recruiting and retaining the people they need; and political uncertainty aside, the biggest brake on higher UK growth is a lack of concerted action to ‘fix the fundamentals’ here at home, with government attention distracted by Brexit.”

The BCC also says it believes inflation has now peaked and will begin easing in the near term, as the impact of the post-EU referendum slide in sterling fades.