British companies look set to cut their investment by the most in 10 years in 2019 as the Brexit crisis drags on, weighing on future economic growth prospects, a survey showed on Monday.
Brexit worries will see business investment contract faster this year and recover more slowly next year than was previously thought, the report says.
The British Chambers of Commerce (BCC) says firms are putting resources into contingency plans, such as stockpiling, in a way that is “not sustainable”. It says companies should be investing in measures aimed at economic growth.” –
The BCC growth forecast for 2019 was slightly upgraded, driven by the “rapid” stock-piling earlier this year.
But it said that growth would be more subdued in 2020 and 2021.
The new BCC growth forecasts assume that the UK avoids a “messy and disorderly” exit from the EU.
BCC head of economics Suren Thiru warned that the deteriorating outlook for business investment is a key concern as it limits the UK’s productivity potential and long-term growth prospects. He warned that leaving the EU on 31 October without a deal or transition period remained the main risk to the UK’s economic future.