KPMG cuts UK economic growth amid “cocktail of uncertainty” over Brexit

// Even if a deal is reached over Breixt, KPMG research predicts a further cut in UK economy
// Confederation of British Industry (CBI) calls for a “national emergency” over falling financial optimism in wake of Brexit
// The CBI implores the government to rule out a “no deal” Brexit

KMPG has cut its short term expectations for the UK economy due to continued uncertainty around Brexit.

The audit firm said it expected the UK economy to grow by 1.2 per cent in 2019 if a Brexit deal can be reached, down from the 1.6 per cent growth it previously forecast. 

KPMG chief economist Yael Selfin said: “The lack of clarity around Brexit, the disappointing data in the Eurozone, the waning stimulus in the US and a slowdown in China are making for a challenging environment.

“This cocktail of uncertainty and dwindling short-term prospects has also had a knock-on effect on business investment, which has continued to slump and is expected to shrink by 0.2 per cent in 2019 as a whole, as businesses choose to further postpone their investment plans.”

The predictions are included in KPMG’s latest quarterly Economic Outlook report, which came out this morning. 

The report added that regardless of the outcome of Brexit, the EU’s size and proximity mean that it will continue to be one of the UK’s largest trading partners in the long term.

Meanwhile the Confederation of British Industry (CBI) this morning declared Brexit a “national emergency” as it revealed that financial optimism has fallen at its fastest rate since 2008 amid ongoing political uncertainty.

The group called for a no-deal Brexit to be urgently ruled out after findings from its latest survey showed business volumes in the sector had also fallen sharply in the first quarter of the year. 

CBI’s chief economist Rain Newton-Smith said: “No-deal has to be clearly ruled out, then MPs must finally compromise and deliver a solution that protects jobs, livelihoods and communities across the UK.

“It is in absolutely nobody’s interest for the uncertainty to drag on, and continually chip away at our economy and financial services sector.”

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