The British Chambers of Commerce (BCC) has released its latest economic forecast, upgrading its growth expectations for the UK in 2019 to 1.3% (from 1.2%).

However, the business group has downgraded its growth forecast for 2020 to 1.0% (from 1.3%) and for 2021 to 1.2% (from 1.4%).

BCC (www.britishchambers.org.uk) says the slightly upgraded growth forecast for 2019 is because of “the exceptionally rapid stock-building early in the year”, adding that “the immediate boost to UK GDP is forecast to come at the cost of more subdued growth in 2020 and 2021, as the unwinding of historically high inventory levels — coupled with weaker business investment — weighs on economic activity.

“Business investment is forecast to contract at a faster rate in 2019 and recover more slowly in 2020 than expected in our previous forecast.

“The continued Brexit impasse — including the growing possibility of a no-deal exit, together with the high upfront cost of doing business in the UK and the running down of excess stock — is expected to suffocate investment activity over the near term.”

The BCC says its latest forecast is a clear warning sign that the next Prime Minister must set out a clear road-map for how the political impasse in Westminster can be broken and an agreement reached to prevent further slowdown in the economy.

Its forecast assumes that the UK avoids a messy and disorderly exit from the EU;a different scenario would lead to revisions in the next forecast.

BCC director general Adam Marshall said: “While politicians are distracted, businesses are left with no choice but to
try and prepare for the unwanted possibility of leaving the European Union on 31 October without a deal and transition period.

“Businesses are putting resources into contingency plans, such as stock-piling, rather than investing in ventures that would positively contribute to long-term economic growth; this is simply not sustainable.

"Business communities expect the next Prime Minister to quickly find a sensible and pragmatic way forward to avoid a messy and disorderly Brexit.”