The British Chambers of Commerce downgraded its growth forecasts for the next three years on the back of weaker trade and manufacturing, which have been dragged by a slowdown in the global economy.
Britain’s economy is now expected to grow 2.4 per cent in 2015, down from a previous estimate of 2.6 per cent, the BCC said.
“Our persistently weak trade performance and current account balance are impacting our overall growth”John Longworth, director general of the British Chambers of Commerce.
It will then expand 2.5 per cent in 2016 and 2017, the BCC said, down from its previous forecast of 2.7 per cent for each of those years.
Slowing growth in the third quarter contributed to its downgrade, the BCC said, which also cut its outlook for the dominant services sector this year.
“Our persistently weak trade performance and current account balance are impacting our overall growth,” said John Longworth, director general of the British Chambers of Commerce, adding that the manufacturing sector has been “hit badly by falling global prospects”.
Consumer spending and the services sector have spearheaded a recovery in Britain which saw its economy outperform those of other advanced nations last year.
Britain’s economy is poised to head the pack once again this year, but policymakers want to see more balanced growth also reliant on strong manufacturing activity and greater exports.
The BCC cut its forecast for growth in the services sector, which makes up the bulk of Britain’s private sector economy, to 2.7 per cent this year from 2.8 per cent previously. It left the 2016 and 2017 growth outlook steady at 2.9 per cent.
The manufacturing sector looks set to contract 0.2 per cent in 2015 and then grow in 2016 and 2017.
Manufacturing has so far failed to contribute positively to economic growth this year, impeded by a slowing global economy which has troubled exporters already struggling with a strong pound. Output in the sector fell unexpectedly in October, reinforcing some surveys that suggest it might not help growth in the last months of the year.