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UK Economy to Grow by 1.8% in 2017, 1.3% in 2018 - European Commission

© Sputnik / Alexey Vitvitsky / Go to the photo bankEuropean Union flags in front of the European Commission headquarters in Brussels. (File)
European Union flags in front of the European Commission headquarters in Brussels. (File) - Sputnik International
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According to EC Spring Economic Forecast, European Commission has revised its 2017 GDP growth forecast for the United Kingdom from 1.5 percent to 1.8 percent.

British pounds - Sputnik International
UK Consumers Face Income Declines Amid Higher Inflation, Slower GDP
MOSCOW (Sputnik) The European Commission has revised its 2017 GDP growth forecast for the United Kingdom from 1.5 percent to 1.8 percent, the EC Spring Economic Forecast showed Thursday.

"Although annual growth is projected to remain unchanged in 2017, at 1.8%, the expected weakening in the quarterly rates of growth is more marked – from 0.7% in 2016-Q4 to 0.3% in most quarters of 2017," the forecast for the United Kingdom said.

The United Kingdom's GDP growth in 2018 is estimated to be 1.3 percent, the European Commission added in its forecast.

"Inflation is projected to continue to rise, reaching 2.6% in both 2017 and 2018 – above the Bank of England’s target of 2%. The upward momentum in inflation is driven by a sharp rise in import prices reflecting the recent depreciation of sterling," the Commission's projection revealed.

The labor market is projected to remain steady. The unemployment rate is expected to reach 5 and 5.4 percent in 2017 and 2018, respectively. The previous estimations from winter had the rate slightly higher at 5.2 and 5.6 percent for 2017 and 2018, respectively.

The EU Commission believes that the business investment forecast is difficult to foresee "in the face of uncertainty" relating to the Brexit negotiations, noting that it represents both an upside and downside risk.

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