KPMG has revised its expectations of GDP growth in the UK to 1.2% for 2019, down from 1.6 per cent cited in December. The forecast for 2020 however remains unchanged at 1.5%.
The figures are published within KPMG’s latest ‘UK Economic Outlook’, where it states in the executive summary that: “The lack of clarity around Brexit and the potential for a no-deal outcome is having a paralysing effect on economic activity and planning in the frst half of the year. Even assuming a favourable resolution that does not damage the UK’s trade links with the EU, the short-term outlook is for weaker growth.”
It goes on: “The short-term outlook is for widespread weakness across all sectors and regions. Surveys suggest that the construction sector as a whole and a full third of regional economies appear to be contracting.”
Business investment is bearing the brunt of Brexit jitters and slumped by 1.4% in the closing quarter of 2018 alone. Investment as a whole is expected to shrink by 0.2% in 2019 with businesses making the choice to delay their investment plans, waiting for clarity.