09 Jul 2019
The continuing uncertainty surrounding Brexit is 'crippling UK business investment', the Confederation of British Industry (CBI) has warned.
The CBI expects business investment to fall at the 'fastest pace since the financial crisis' for the rest of this year.
The business group predicts a fall of -1.3% in investment this year, followed by growth of 0.9% in 2020, which is based on a Brexit deal being reached. Despite the fall in business investment and volatile economic growth during the first half of 2019, the CBI predicts GDP growth of 1.4% this year.
Brexit stockpiling and a surge in gold bullion pushed up import growth during the first half of 2019. In addition, household spending grew, underpinned by a recent pick-up in real earnings.
Commenting on the matter, Rain Newton-Smith, Chief Economist at the CBI, said: 'Looking through the volatility in growth over the last six months, our view of modest economic momentum ahead is largely unchanged.
'However, there is a lot going on underneath the surface and the make-up of growth in our forecast is more skewed towards consumers.
'Our forecast represents what could be in the event of an orderly Brexit – a decent foundation upon which we can take the reins and re-focus on vital domestic priorities that have been neglected.'