The economy of the United Kingdom is set to slow down further after the upcoming Brexit proceedings
The GDP of the United Kingdom was estimated to decline from its 1.8% growth last year to only 1.5% this year and 1.4% next year according to research.
One of Britain’s primary drivers of economic growth has always been the country’s consumer spending. Despite this, recent household spending has been pressured by the growing inflation rate and a weak wages growth.
According to economists, the looming uncertainty brought by Brexit can also possibly affect business investment firms negatively as the negotiations might put capital expenditure plans on hold.
Last month, a 0.2% growth was recorded for the economy of Britain. Significantly lower than the 0.7% growth during the last quarter of 2016.
Numbers from British household spending have also sharply changed as the continuous decline in wage numbers followed inflation rates. Inflation has recorded its highest in May at 2.9% which happens to be its highest level in the past four years.
The Bank of England predicted that the inflation might reach 3% while others have expected the GDP to struggle during the second quarter of 2017.
The Office for National Statistics recently revealed that annual total pay has inched down by 0.7% which happens to be the lowest level since 2015.
The recent setbacks the British pound have experienced over the past year have sent prices of goods, food, and gas up while wages were not able to keep up.
Borrowing data have increased in the past couple of months as household savings data recorded new lows during the beginning of the year.
However, the possible recovery in the economy of the U.S. and Europe along with progressive Brexit negotiations can drive economic growth up by 1.9% this year and 2.6% next year.
The outlook at the moment remains cloudy due to the ongoing uncertainty regarding the negotiations along with the overall outlook of the global economy has affected the economy even further sparking fears of a small crisis.