The Bank of England has cut the growth forecasts for the UK economy to 1.3% this year, from the previous figure of 1.5%. The bank warned that Brexit was causing an negative impact on the economy and was leading to “a marked depreciation of the sterling exchange rate”.
The bank’s report also noted:
“Brexit-related developments, such as stockbuilding ahead of previous deadlines, are making UK data volatile. After growing by 0.5% in 2019 Q1, GDP is expected to have been flat in Q2, slightly weaker than anticipated in May. Looking through recent volatility, underlying growth appears to have slowed since 2018 to a rate below potential, reflecting both the impact of intensifying Brexit-related uncertainties on business investment and weaker global growth on net trade.”