According to a summer forecast by the only non-governmental forecasting group, the EY ITEM Club, the UK has hit the slowest growth rates since 2012. The group used the HM Treasury’s model of the UK economy. The UK GDP is expected to grow by 1.4% in 2018. This is the slowest growth rate since 2012 and even the forecast for 2019 is nowhere fruitful. The forecast has gone down from 1.7% to 1.6% in the recent forecast.
When the EY ITEM Club forecast was released in April, its spring instalment, there were hopes that the economy would make up in the first quarter and bounce to a place where it can hold some dignity. However, Howard Archer, the chief economic advisor to the team has revealed that those aspirations had been met with mixed results.
There had been a good retail growth in April and May and there had even been some green shoots in the new car market, which shows a recovery from the weakness related to weather issues. But the niches like manufacturing or economy which feature a bulk of the economy, have not shown much momentum.
The GDP rise by a 0.2% quarter-on-quarter provided a poor start to the economy, to begin with. Though the rebound in consumer activity in the second quarter was a comeback, the slow growth may suggest that businesses would receive a low growth economy over the next 3 years, according to Mark Gregory, the chief economist.
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