UK set for sluggish growth even if Brexit goes well

Bloomberg

UK growth is set to be sluggish for the next few years even if a Brexit deal is secured, according to the National Institute of Economic and Social Research.
In a report on Wednesday, the think tank lowered its estimate for growth this year to 1.5 percent from 1.9 percent, and said output will pick up only slightly to 1.7 percent in 2020 and 2021.
“It’s not a collapse in the economy, but certainly there is a slowdown,” Amit Kara, head of UK macroeconomic forecasting at Niesr, told reporters in London. “There’s still going to be a period of uncertainty which will probably last for at least a year. It’s only then when we’ll know the exact relationship and that’s when the cloud of uncertainty will lift.”
Niesr’s central forecast is based on a scenario where the UK leaves the European Union at the end of March with an exit deal in place, leaving the economy limping along even if
its most pressing barrier to growth is resolved. A more chaotic outcome could see investment tumble, pushing growth even lower, the think tank said.
With the UK scheduled to depart the EU in less than two months, Prime Minister Theresa May’s government has yet to get her exit plan through Parliament. That uncertainty has led to weaker business investment, while a depreciated pound hasn’t bolstered exports as much as expected, Kara said.