UK Industry: Brexit, weak global demand to hurt UK in 2020

The Confederation of British Industry (CBI) and a manufacturing trade body, Make UK, have made downward revisions to their 2020 UK growth forecasts amid looming Brexit risks and bleak global economic outlook, per Reuters.

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The CBI on Monday predicted economic growth of 1.3% this year and 1.2% in 2020, followed by a pick-up to 1.8% in 2021, assuming Johnson reaches a trade deal with the EU that leads to no tariffs and little divergence from EU rules.

CBI chief economist Rain Newton-Smith said: Alongside perennial Brexit uncertainty, (businesses) are also contending with softer global demand. A no-deal Brexit would put the brakes on UK growth and realise businesses’ worst fears.

Make UK halved its forecast for manufacturing growth next year to 0.3% from 0.6%, though it kept its forecast for growth in the overall economy in 2020 unchanged at 1.4%, up from 1.3% this year.

Export orders have increased slightly this quarter, indicating greater confidence from foreign customers about purchasing UK goods as concerns about an end of year no-deal Brexit fade, Make UK’s chief executive, Stephen Phipson, said.