According to latest estimates by EY ITEM Club, economic growth in the UK is expected to slow down considerably in 2020. Following an analysis of official government data, EY ITEM Club now expects UK’s economy to grow by only 1% in 2020, significantly lower than the 1.5% growth estimated previously.

GDP growth for 2019 is expected to touch 1.3% in 2019, against the previously estimated 1.5%, on account of rising political uncertainties driven by the early general elections and the latest delay in Brexit until January 2020.

What’s even more worrying is that EY ITEM Club has revised GDP forecasts for the UK economy between 2021 and 2023 lower as well, on account of continued uncertainties and looser relationship with the European Union. In case the UK opts for a free-trade deal with the EU with lower regulatory alignment with the Union, higher non-tariff barriers could impede growth among certain businesses in the UK, contributing to further slowdown in economic growth.

EY ITEM Club also expects business investment to shrink by 1.3% in 2019 and stagnate next year as investors await political clarity to emerge post-Brexit. Business investment is likely to witness a very gradual improvement only after Q2 2020.