Economic growth in the UK is expected to slow to 1.7 percent this year and 1.9 percent in 2018, according to the latest forecast by the National Institute of Economic and Social Research (NIESR). Inflation, meanwhile, is expected increase to 3.3 percent this year, up from an average of 1.2 percent in 2016, which could significantly impact household spending. The UK economy grew by 2 percent in 2016. “Robust consumer-spending growth was behind the economic momentum of 2016,” said Simon Kirby, head of macroeconomic modeling and forecasting at NIESR. The inflation rate is expected to drop down to 2.9 percent in 2018.
The world economy, meanwhile, is expected to increase to 3.1 percent from 3 percent in 2016 and to 3.5 percent yin 2018. NIESR warns, however, that its predictions could be impacted by any sudden economic policy changes made by new US President Donald Trump. “Our forecast assumes established policies,” NIESR wrote. “Potential policy changes in the US and any response in the rest of the world therefore pose significant risks to our projections.”
