Despite the UK economy continuing to grow and indeed accelerate in terms of GDP growth according to Q3 predictions, the British Chamber of Commerce (BCC) paint a gloomy picture of what lies ahead.
The body that represents and supports UK businesses predicts that a squeeze on household budgets brought by an increase in inflation and the failure of exporters to take advantage of the opportunities provided by the fall in value of sterling will continue to keep the economy on a trajectory of low growth.
While the forecast for the third quarter is for a 0.4% increase in GDP, the BCC forecasts GDP growth will be 1.2% in 2018, which is down from their previous estimate of 1.3%. In 2019 the prediction is for 1.4% which despite being an increase on 2018 still represents a less optimistic prediction than the original 1.5% forecast.
The Eurozone meanwhile is expected to see growth of 1.8% in 2018 and 1.7% in 2019.
Whether these predictions turn out to be accurate will depend on wage growth keeping pace with inflation. If wages fail to keep up then this will inevitably bring a spending squeeze which will inevitably have a knock-on effect on the rest of the economy.