UK growth to slow due to Brexit, says European Commission
Updating its British growth forecasts, the Commission says leaving the EU will weigh on the UK economy over the next two years.
Monday 13 February 2017 14:40, UK
The UK economy is set to see its growth slow over the next two years due to the impact of Brexit, the European Commission has said.
Following the publication of the Commission's Economic Forecast, economic commissioner Pierre Moscovici told a Brussels press conference that "the UK's vote to leave the EU continues to pose a significant downside risk," both to the British economy and to the wider Eurozone.
But despite its warnings the Commission has also upgraded its forecasts for UK growth in 2017 to 1.5%, up from a 1% projection made last autumn.
This is, however, still significantly below its pre-Brexit predictions of 2.1% growth, and reflective of the "unbalanced" growth the UK has experienced since June.
The report warns that the impact of the EU referendum result has "yet to be felt" and predicts that, although Britain's economy posted positive growth of 2% in 2016, this will weaken over the course of the next two years.
It forecasts that the UK will be overtaken by growth in the rest of the European Union by 2018, when the UK is projected to see an economic rise of 1.2% compared to the EU's 1.8%.
Looking at the wider global economy, the report lists a number of other world events which could have a detrimental impact on the European economy, including the upcoming elections in France and the possibility of protectionist trade policies being enacted in the US under Donald Trump.
But despite the potential pitfalls, the Forecast predicts an uptick in the global economy this year and in 2018.
Mr Moscovici said: "The European economy has proven resilient to the numerous shocks it has experienced over the past year.
"Growth is holding up and unemployment and deficits are heading lower.
"Yet with uncertainty at such high levels, it's more important than ever that we use all policy tools to support growth.
"Above all, we must ensure that its benefits are felt in all parts of the euro area and all segments of society."