This archive report was first published on 7 November 2019.
On November 7, 2019, the Bank of England released its November Monetary Policy Report, which revealed that the UK's economic growth is expected to be cut in half due to ongoing uncertainty surrounding Brexit.
The report stated that the economy is expected to grow by a mere 0.2% per quarter this year, down from almost 0.4% the previous year. This decline is attributed to businesses cutting spending and delaying investments due to the uncertainty surrounding Brexit.
According to the report, 'growth in the UK economy has been volatile this year in part because of Brexit preparations.' The Bank also noted that 'we expect growth this year to be roughly half that in 2018.'
Business spending has been particularly affected, with investment falling for five consecutive quarters. The report attributed this decline to 'uncertainty about the outcome of Brexit,' which has led businesses to delay spending on new machinery and other investments.
Before the EU referendum, business investment was growing at a rate of around 5% per year. However, since then, it has been declining due to the uncertainty surrounding Brexit.
Household spending has also slowed, but less sharply, due to high employment levels. The Bank also pointed to a global slowdown as one of the factors contributing to the decline in the UK's economic growth.
Dr. Kerstin Braun of trade finance firm Stenn Group stated, 'Even if we avoid a Brexit crash out, or if Brexit is scrapped all together, the UK is slowly running out of gas, driven down by persistent uncertainty and the flagging global economy.'
TUC General Secretary Frances O'Grady added, 'This is the Conservatives' economic legacy. Their decade of cuts and under-investment has put growth in the slow lane.'
However, the Bank of England also noted that the risk of a no-deal Brexit has fallen recently, which may lead to a decrease in uncertainty facing households and businesses.
