IMF cuts UK growth forecasts due to Brexit impact
The International Monetary Fund has downgraded its forecasts for UK growth in 2016 and 2017, believing that "uncertainty following the Brexit vote in June will take a toll on the confidence of investors".
"Slower growth is expected since the referendum as uncertainty in the aftermath of the Brexit vote weighs on firms' investment and hiring decisions and consumers' purchases"
UK growth is predicted to slow to 1.8% this year and to 1.1% in 2017, down from 2.2% last year.
It expects the euro area to expand by 1.7% this year and 1.5% next year, compared with 2% growth in 2015.
On the whole, the IMF now believes that advanced economies will expand just 1.6% in 2016, less than last year’s 2.1% pace and down from the July forecast of 1.8%.
Global economic growth will remain subdued this year following a slowdown in the United States and Britain’s vote to leave the European Union, the IMF said in its October 2016 World Economic Outlook.
The report said: "In the United Kingdom slower growth is expected since the referendum as uncertainty in the aftermath of the Brexit vote weighs on firms' investment and hiring decisions and consumers' purchases of durable goods and housing."
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