Economy to grow by 1.7 per cent this year, says ICAEW

The Institute of Chartered Accountants (ICAEW) has predicted that the UK economy will grow by 1.7 per cent this year, despite a slump in growth during the first quarter (Q1).

Earlier this year, economic growth slowed to just 0.2 per cent in Q1, but the leading accountancy body is expecting a surge in growth driven by exports later in the year.

It estimates that growth will hit 1.7 per cent by the end of 2017 – up from the 1.6 per cent previously predicted.

Justifying its forecasts, the body said that exports would continue to be boosted by the relative cheapness of British products in the wake of recent falls in the value of sterling.

However, the ICAEW has warned that the Government must intervene in order for the UK’s economy to remain prosperous.

It says that the Government has a duty to address other problems the fall in sterling has caused elsewhere in the economy – and to ensure British businesses remain confident throughout the course of the year.

Michael Izza, chief executive at the ICAEW, said: “I would like to see the new Government put business and the economy at the top of its agenda, doing more to create a climate of optimism and certainty which will help build confidence.

“It also needs to send a clear signal to the rest of the world that Britain continues to be a good place to do business, to invest and to trade.

“Not to do so could put at risk the economic progress we have made over the last two Parliaments,” he warned.