As if being branded “too lazy and too fat” wasn’t enough, our nation’s business community’s now been shaken by the news that UK growth forecasts have been downgraded by the British Chambers of Commerce.
In its first economic forecast since the EU referendum in June, the BCC predicted gross domestic product growth of 1.8 per cent in 2016, 1 per cent in 2017 and 1.8 per cent in 2018. They were lowered from previous healthy estimates of 2.2 per cent growth this year, 2.3 per cent in 2017 and 2.4 per cent in 2018.
The reasons given for the lower forecasts include weaker consumer spending and a large fall in investment – both of which some commentators are aligning with the decision to leave the European Union.
This is the second ‘ouch’ moment for UK businesses in almost as many days after pro-Brexit Trade Secretary Liam Fox’s remarks were published over the weekend where he branded our nation as “not the free-trading nation it once was. We have become too lazy, and too fat on our successes in previous generations.” He was recorded making the comments at a Conservative campaign group’s event by The Times newspaper. They also reported Fox criticising company bosses for choosing to play golf on a Friday afternoon rather than striving to contribute to “our national prosperity”.
Downing Street said he was clearly expressing private views.
The exit process with the EU has yet to be formally triggered by the UK, however these new figures are likely to cause further uncertainty over the real impact of Brexit on business confidence.
Head of Businesscomparison.com, Philip Brennan comments:
“The market needs to know exactly what the exit will mean both for the economy and in terms of support and funding. For lots of businesses European funding and grants are of great importance so, I was encouraged to see the government confirming it will cover EU research projects until 2020 and uphold the common agriculture policy which generates billions of pounds of revenue for British farmers. However, there are still many areas that are unaccounted for. Northern Ireland, Wales and Scotland who have seen much support from the EU continue to wait eagerly, but will Scotland wait at as the Brexit has reignited their own exit referendum debate?
I think it will be many years before we see any benefit to the exit and in the meantime, things could get tougher for businesses.
However, it’s not all doom and gloom. Consumer spending is up and unemployment is at record lows. The drop in interest rates has meant that the mortgage market hopefully will be buoyant with people looking to remortgage and there are positive signs that purchases are back on the rise. Credit rating agency Moody’s predicts an economy slow down but no recession.”