Skip to content

British Chambers of Commerce Lowers Economic Growth Predictions

New figures that have come out from the British Chambers of Commerce (BCC) look at the UK’s expected economic growth in 2020. Overall, they suggest that growth will be slower than they had originally forecast.

In fact, the 2020 growth prediction has been reduced from 1% down to 0.8%. At the same time, they also lowered their expectations for 2019 from 1.3% to 1.2%.

What Factors Have Caused This?

There are a number of reasons why the BCC have revised their numbers for 2020. BCC director general Adam Marshall stated that this prediction takes into account a “number of warning lights” that they see flashing for the UK’s economy.

Among them are the issues and fears arising from Brexit. Indeed, they pointed out that this forecast is based on the UK avoiding the possible damage that could come from a no-deal Brexit. They also mentioned the slowdown in the global economy as being another reason for this.

The continuing tensions between the US and China is another important factor in why they believe that 2020 will see slower growth in the UK. The ongoing trade war between these two countries has affected many other nations around the planet, with Germany among those to be hardest hit. 

The three months to June 2019 saw the British economy shrink by 0.2%. However, the BCC have forecast that the current quarter will show a slight improvement, leading to a predicted growth rate of 0.3%.

What Do Other Sources Say?

The BCC is in a strong position to understand the challenges and opportunities facing the British economy. This is a highly respected organisation that contains members who are responsible for employing about a fifth of the country’s total workforce.

Yet, not all analysts agree on the figures that they have calculated. For example, a poll carried out by Reuters among a group of economists came back with an average growth forecast for 2020 of 1.1%.

The Institute of Directors also carried out a survey in July on the future plans for British businesses. The results that they obtained showed that close to a third of their members are thinking about starting operations in another country due to the impact of Brexit or have already done so.

On the other hand, just 9% of them reported that they are thinking about shifting some of their operations back to the UK. It is worth noting that subjects such as international debt collection have become more important in the current economic climate.

A little over half of the companies surveyed answered that a no-deal Brexit would be the worst possible outcome for the country.

Recession Fears Have Dropped But Not Disappeared

The fact that July saw a higher than expected rise in economic growth helped to ease fears of the county sliding into recession. However, it is clear that the country’s growth is still in the balance.

The exact outcome of Brexit in October will help to define the near future of the British economy. Therefore, any prediction made now comes with the caveat that it is dependent upon what exactly happens in October.