The 海角视频 economy will grow at a slower pace than expected next year, with trade set to lag 鈥渟ignificantly鈥, a business group is predicting.
The British Chambers of Commerce (BCC) said economic growth was projected to slow down to 4.2% in 2022, compared to its previous forecast of 5.2%.
The downgrade largely reflects a softer outlook for consumer spending amid an anticipated 鈥渞unning down鈥 of household savings built up during lockdowns, said the BCC.
The rising cost of imported raw materials and higher energy prices are expected to lift CPI inflation to a peak of 5.2% in the second quarter of 2022, it was predicted.
If the current global supply chain disruption eases in the second half of 2022, inflation is expected to drift back towards the Bank of England鈥檚 2% target by the middle of 2023, said the report.
Suren Thiru, head of economics at the BCC, said: 鈥淥ur latest outlook suggests that the loss of momentum in the third quarter was more than just a temporary blip, with 海角视频 growth forecast to be more subdued for a sustained period as supply disruption, staff shortages and surging inflation limits activity.
鈥淭he downgrades to our forecast reflect a moderating outlook for key areas of the 海角视频 economy, including consumer spending and trade.
鈥淐onsumer spending is likely to be more restrained than expected over the near term from a combination of negative real wage growth and stretched household finances amid rising inflation.
鈥淭rading conditions for 海角视频 exporters are expected to remain difficult over the forecast period with the lingering impact of Covid and Brexit expected to weigh on trade flows for some time to come.
鈥淭he Omicron variant could stall the recovery if it triggers a prolonged reluctance among consumers to spend or a renewed supply shock by exacerbating current staff shortages through a new 鈥榩ingdemic鈥 and driving more supply chain disruption.鈥
