UK exports set to grow in subdued UK economy, says BCC economic forecast
19 March 2018
The UK’s international trade is forecast to grow in 2018 and the next two years, says the latest British Chambers of Commerce (BCC) forecast.
Exports are expected to grow by 3.6 per cent in 2018, 3.4 per cent in 2019 and 3.0 per cent in 2020, says BCC which predicts overall economic growth for the UK economy riding on a strong global performance. Meanwhile, imports are expected to grow by 2.8 per cent in 2018, 2.9 per cent in 2019 and 3.1 per cent in 2020.
UK growth, driven mainly by slightly-stronger-than-expected consumer spending, will rise from 1.1 per cent to 1.4 per cent in 2018 and from 1.3 per cent to 1.5 per cent in 2019 while the first forecasts for 2020 indicate 1.6 per cent growth.
BCC says: “Exports are expected to remain buoyant due to strong global growth, especially in key markets such as the Eurozone and US. Even so, with imports also likely to grow at a good rate, net trade’s contribution to UK GDP growth will be limited, particularly with little evidence of a sterling boost to the UK’s overall position.”
The manufacturing, construction and services sectors are expected to grow at varying degrees through to 2020 but, overall UK GDP growth, will remain well below average and among the worst performing G7 economies until 2020 at the earliest.
Productivity is expected to grow but remain hampered by deep-rooted problems in the economy, including skills shortages and chronic underinvestment in the UK’s infrastructure.
Inflation is expected to peak at 2.9 per cent this year and ease as the effect of the post-EU referendum sterling slide fades. While average earnings are expected to grow by slightly more than previously forecasted, real earnings growth will not return until 2019.
An increase in UK official interest rates is expected in the second quarter of 2018 to 0.75%, followed by another rise in the first quarter of 2019.
BCC director general, Dr Adam Marshall, says: “Although strong global conditions have given the UK a boost through higher export demand in recent months, we have serious concerns about the potential for further UK growth when the performance of key trading partners slows.”
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