British Economy To Weaken During Brexit Talks

The European Commission warns that the risks to its forecasts are “exceptionally large”, thanks to the unclear intentions of U.S. president Donald Trump, high-stakes elections across Europe this year, and the ongoing Brexit negotiations.

It forecasts that the United Kingdom will be overtaken by growth in the rest of the European Union by 2018, when the United Kingdom is projected to see an economic rise of 1.2% compared to the EU’s 1.8%.

The most significant headwinds for the region are expected to come from uncertainty over the impact of U.S. economic policies on the global economy as well as the rise of far-right anti-EU political parties in Europe during key elections in 2017. Its 2017 prediction was lifted to 1.6 per cent, up from 1.5 per cent, and its 2018 prediction to 1.8 per cent, up from 1.7 per cent. However, the outlook is surrounded by higher-than-usual uncertainty.

Hroysman said it was very important to send a strong signal to Ukrainians that ties with the European Union were “a positive result and would improve their lives”.

Despite the dominant bleak discourse among European decision-makers over the past months, the EU outperformed the U.S. economy in 2016.

It forecast euro zone economic growth to lose some speed this year before rebounding in 2018.

Theresa May is expected to fire the starting gun on the UK’s two-year European Union divorce process by the end of next month.

Forecasts for the eurozone area for 2017 were revised higher to 1.6% from the previous 1.5%, with the 2018 forecast upped to 1.8% from 1.7% before.

This is still “short” of the ECB’s target of an inflation “below, but close to 2 percent”, the Commission said.

The upward trend in investments, mainly related to ongoing energy projects, such as the Trans Adriatic Pipeline, is also projected to continue in the next two years. It described Italy’s growth as “stable by modest” as “structural weaknesses hamper a stronger recovery”.

He said that as long as Britain was in the bloc, the European Commission was in charge of negotiating trade deals.

“The economy is expected to gather momentum in 2017 and 2018 as investment gradually recovers from a substantial contraction in 2016”.

“This decline reflects lower interest spending due to exceptionally low interest rates”.

According to the EC, in 2017 deficit will amount to 2.9 percent of GDP, and in 2018 the figure will grow to three percent.

On top of these issues, Donald Trump’s administration is set to land another blow to the bloc’s beleagured financial system, Brussels forecast.