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Economic growth is projected to remain modest at 1.4% in 2018 and 1.3% in 2019, owing to high uncertainties about the outcome of Brexit negotiations. There is little slack in the economy following years of strong growth, and unemployment is projected to remain below 5%. Inflation is projected to fall gradually to slightly above the 2% target of the central bank by the end of 2019.
With inflation above target but still large uncertainties, monetary policy is projected to normalise at a very gradual pace. Additional fiscal consolidation is planned for this year and next. While this is appropriate given the economic outlook, the authorities should stand ready to further increase productivity-enhancing measures on investment if growth weakens significantly ahead of Brexit. Greater spending on education and training of low-skilled workers would increase productivity and enhance inclusiveness. From an economic point, Brexit negotiations should aim at preserving open trade with the European Union and high access for financial services to EU markets.
Economic Survey of United Kingdom (survey page)
The Economic Consequences of Brexit: A Taxing Decision (main web page with paper)