The British Chambers of Commerce (BCC) has lowered its growth forecast for UK GDP but said it expects the country to avoid a recession.
In its first economic forecast since the EU referendum, the BCC on Monday downgraded its forecast from 2.2% to 1.8% in 2016, from 2.3% to just 1.0% in 2017, and from 2.4% to 1.8% in 2018.
The business group cited weaker consumer spending and a large fall in investment as the main reasons. It also pointed to the uncertainty surrounding the UK?s long-term political arrangements with the EU, as well as when any actions will take place, which will likely dampen growth prospects towards the end of 2016 and in 2017.
However, the BCC added that the UK ?is expected to skirt with, but avoid, recession? and said the drop in sterling since the referendum will help improve the UK?s net trade position.
Dr Adam Marshall, acting director general of the BCC, called for ?stability, clarity and action? from the government and said that ministers ?must act to support business investment and confidence?.
?They should start with the long list of business-boosting infrastructure projects that have been put on hold for far too long – including a firm decision on a new airport runway, new nuclear investment, and road and rail schemes,? Marshall said in a statement.
?We also need to see policies to encourage business investment, such as revisions to our outdated business rates system, which penalises companies for investment in plant and machinery, and hits firms before they have even turned over a penny.?
The BCC and the CBI have also responded to reported remarks made by International Trade Secretary Liam Fox, who apparently said that Britain had grown ?too lazy and too fat? on earlier successes and suggested that businessmen prioritised ?golf on a Friday afternoon? over trying to boost the country?s prosperity.
BCC president Francis Martin, quoted by the Guardian, argued that politicians need to support businesses as the UK works out its exit from the European Union.
?Business and government need to work together if we?re to make a success of the transition ahead,? Martin said. ?Business people don?t mind a robust conversation, but they will insist on a constructive one.?
Also referring to Fox?s comments, a CBI spokesperson said in a statement: ?This is a time for unprecedented partnership between all business and the government to help our world leading companies take even more advantage of exporting opportunities. Now more than ever we must, in particular, support our small and medium sized businesses to export as they are such a critical backbone of our economy.?