|
|
The think tank's UK growth forecast for 2016 has been cut from 2.3% to 1.9%, and from 2.6% to just 0.4% for 2017.
Meanwhile its forecast for GDP growth for 2018 was slashed from 2.4% to 1.4%.
Its report said the Brexit vote would have "severe confidence effects on spending and business investment", which would lead to anaemic GDP growth over the next three years.
However, the drop in the value of the pound could bolster exports by 3.4% next year, the Item Club said, with imports falling by 0.3%.
Overall, the move would see net exports adding 1.1% to GDP in 2017, it added. [...]
A new survey from Deloitte found 82% of chief financial officers of both FTSE 350 and large privately owned companies expected to cut capital spending in the next year. That was the biggest proportion on record and more than double the 34% in the first quarter, Deloitte said.
Its survey was conducted between 28 June 28 and 11 July, after the EU referendum and just before Theresa May became the new prime minister.
Almost all the CFOs surveyed said the level of uncertainty facing their businesses was higher than normal.
'Horrible' impact
Ian Stewart, Deloitte's chief economist, said: "Perceptions of uncertainty have soared to levels last associated with the euro crisis five years ago." [...]
EY ITEM Club UK Summer forecast
Brexit blow to business confidence - Deloitte CFO Survey: 2016 Q2