Feb 1, 2017
UK economy to slow down this year and next, says think tank
The National Institute of Economic and Social Research revised up its forecasts for UK growth to 1.7% this year and 1.9% in 2018. Both would still be a slowdown from the growth rate of 2% recorded for 2016, when the UK was the world's fastest growing developed economy. "Robust consumer spending growth was behind the economic momentum of 2016," said Simon Kirby, head of macroeconomic modelling and forecasting at NIESR. He said households would see their purchasing power "Eroded" this year and in 2018 due to sharply rising prices. The NIESR, widely seen as the UK's oldest independent research body, thinks inflation will jump from an average of 1.2% recorded over the course of 2016, to 3.3% this year then back down to 2.9% in 2018. It believes the world economy will grow at a faster pace in the next couple of years, with the annual growth rate rising from 3% in 2016 to 3.1% this year, and then to 3.5% in 2018.
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