Martin Beck (pictured), EY ITEM Club’s Senior Economic Advisor, informed the audiences that the UK economy is over the worst but is struggling to accelerate compared to its global counterparts and is unlikely to see significant growth in 2018.
Representatives from local financial services industry learnt that the UK’s GDP growth in 2017 was 1.8%, which was better than widely expected. However, this compared unfavourably with 2017 GDP growth of 2.5% for the Eurozone, 2.3% for the US and an estimated 3.0% globally.
They also heard about the results of EY ITEM Club’s Winter Forecast, which included a slight drop in consumer spending growth, hikes in interest rates and a rise in business investments.
Mr Beck commented: “The tight linkages between the economies of the Channel Islands and the UK mean that the islands should benefit from some of the upsides we expect for the UK this year, particularly falling inflation and the gains that will deliver to consumers’ spending power.
“Moreover, for economy’s as open to and dependent on business with the rest of the world as those of the Channel Islands, our expectation of a broad-based strong performance from the global economy is good news. However, the Channel Islands’ economic outlook will continue to be buffeted by political developments in the UK, particularly around Brexit and the not- insignificant possibility of another general election and a change of government. The ability to react nimbly to the challenges and opportunities presented by these developments will remain key.”
Wendy Martin, EY Tax Partner and host of the Jersey presentation concluded: “The UK economy’s stability will no doubt provide Channel Island businesses with some peace of mind for the short term. That said, the lack of growth expected for the next few years and wavering UK political stability means businesses should be seizing the opportunities provided by the strong global growth and developing post-Brexit business strategy, which identifies where future value will be created.”