The UK Economy: Forecast Summary

Abstract

Economic growth has stalled and there is around a one-in-four chance that the economy is already in a technical recession.The outlook beyond October, when the United Kingdom is due to leave the European Union, is very murky indeed with the possibility of a severe downturn in the event of a disorderly no-deal Brexit.On the assumption that a no-deal Brexit is avoided, the economy is forecast to grow at around 1 per cent in 2019 and 2020 as uncertainty continues to hold back investment and productivity growth remains weak.On the assumption of an orderly no-deal Brexit, the economy is forecast to stagnate, before starting to grow again in 2021.Some loosening of the public purse appears inevitable and we expect public sector borrowing to rise above 2 per cent of GDP, with the possibility of substantial over-runs of the government's fiscal objectives in the event of a no-deal Brexit.