The UK will start to feel the Brexit’s effects very soon. An OECD’s report has outlined a sharp decline in Britain’s gross domestic product (GDP) growth: in 2018 the growth is set to 1.2% and 1.1% in 2019.
The “uncertainty over the outcome of negotiations around the decision to leave the European Union and the impact of higher inflation on household purchasing power”, is the reason for this slowdown, as reported the institute.
The economic think tank also warned against further rate rises from the Bank of England (BoE). “Monetary and fiscal policies need to remain accommodative. Inflation has risen to 3%, but in the absence of wage pressures the central bank should look through the temporary inflationary impact of currency depreciation,” it is written in the OECD’s report.
This is a sign that Britain could not achieve growth without investment in technology and infrastructure, as stressed by BDO tax partner Paul Falvey.
The UK decided to leave the European Union in the summer 2016, after an historic referendum which divided the country. The real effects of Brexit on the whole Europe and on the UK itself are still unknown.