According to a report
by the British Chambers of Commerce (BCC) business investments across the UK
are coming to a halt and the economy is forecasted to see zero growth in the
second quarter.
As mentioned in
Parliament on Monday, the Bank of England’s forecast states that there is a one
in four chance of the UK economy dipping into recession. The manufacturing
sector is already in recession as stockpiles are now stagnant because Brexit
has not yet been settled, with car manufacturing down five percent in the last
quarter. This means that jobs and investments have been cut.
This bleak picture
will most probably turn the Bank of England towards the decision to not raise
interest rates until sometime in the coming year, according to Bloomberg. This
decision will be announced on Thursday.
The BCC’s report
states that “business investment is forecast to contract at a faster rate this
year and recover more slowly in 2020 than expected in previous forecasts.” The
culprits in this scenario, the report went on to say, is political uncertainty
and the growing possibility of no-deal Brexit.
“A messy and disorderly exit from the EU
remains the main downside risk to the UK’s economic outlook as the disruption
caused would increase the likelihood of the UK’s weak growth trajectory, translating
into a more pronounced deterioration in economic conditions,” the report
explains.
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