The manufacturing sector is expected to contract by 0.2% in 2015, followed by growth of 0.7% in 2016, and 2.0% in 2017. Total industrial output growth is forecast at 1.1% in 2015, 0.8% in 2016, and 1.3% in 2017
John Longworth, director general of the BCC, said: “Official data is starting to reflect what our quarterly economic survey has been showing all year – that our persistently weak trade performance and current account balance are impacting our overall growth. Similarly, the manufacturing sector has been hit badly by falling global prospects, tipping an earlier prediction of growth in 2015 to an expected contraction.
“We cannot rely so heavily on consumer spending to fuel our economy, especially when driven by increased borrowing. We have been down this path before, and know that it leaves individuals and businesses exposed when interest rates do eventually rise.”
He added: “The UK still needs to see a fundamental shift in its economic model if we are to remain relevant and prosperous in a changing world economy. Anyone who says that the job is nearly done needs to look again at the trade deficit, current account position and long-term business investment – and realise there’s still a long way to go.”
David Kern, chief economist at the BCC, said: “Dangers facing the UK economy make it important to sustain areas of domestic strength in order to underpin UK growth. While we expect the first increase in UK interest rates in Q3 2016, we believe that rising international uncertainty provides strong arguments for the MPC to delay this.”
The forecast also predicted that growth in real exports would be 3.5% in 2015, 3.4% in 2016 and 3.0% in 2017.
