Friday 14 September 2018, Following a weak start to 2018, the UK economy has seen a slight pick-up due to the weather and the World Cup. However, ICAEW predict GDP growth will remain un-changed at 1.3% for the year. As discussions with the EU are ongoing and the government prepares for the potential of a no-deal Brexit, businesses remain cautious of over spending on wage increases and job creation.
Business investment grew by just 0.5% on the quarter in Q2 2018 and evidence from the ICAEW Business Confidence Monitor (BCM)™ suggests companies are expected to become even more cautious in coming months. One driving force behind the reluctance to invest is uncertainty surrounding the UK’s future relationship with Europe after withdrawing from the EU.
“Brexit has been restricting business growth since the referendum in 2016, and with the potential of a no-deal exit, businesses don’t expect any comforting news in the immediate future. It is likely that these unpredictable factors will result in business investment growth remaining modest for the foreseeable future.”
“However, it is not all bad news. The fundamental economic and financial conditions for investment remain good and rates of return on investment remain very strong relative to recent years. Once negotiations come to a climax, whether it is a deal or no-deal Brexit, businesses will have more clarity on what to expect for the future.”
Please direct all media inquiries related to this article to:
Caroline Florence - ICAEW press office
Tel: +44 (0) 207 920 8564