The UKs GDP is predicted to grow at a rate of 1.7% this year, and by 1.9% in 2018, according to forecasts by the National Institute of Economic and Social Research (NIESR) released today.
This follows estimates from the Office for National Statistics in April, which showed the country's economy expanded by 0.3% in the first quarter of 2017 - less than half the 0.7% recorded in the previous three months.
This was partly attributed to a moderation in consumer spending, which is expected to remain weak throughout this year and the next, as inflation erodes the purchasing power of households.
"GDP growth over the next couple of years will be subdued, growing at less than the economy's long-run potential rate of 2% per annum," NIESR head of macroeconomic modeling and forecasting, Simon Kirby, said.
"The rate of inflation is expected to rise from 2.3% per annum in March to almost 3.5% by the end of 2017. By 2018 we expect consumer spending growth to have effectively stalled."
In contrast, the NIESR forecast that global GDP is set to pick up from the 3.1% recorded last year, to 3.3% in 2017, and 3.6% in 2018, although medium-term growth is still well below pre-crisis rates.
It was found that growth worldwide has become more broadly based, including within the Euro area and emerging economies, with an upturn in Brazil's GDP expected in 2017, as it recovers from the deep recession it was still in last year.
Russia has started to recover from its recession, and India's GDP growth is the fastest among the major economies, although the gradual slowing of China's growth, interrupted in late 2016, is likely to resume this year, according to the NIESR analysis.
However, there are associated risks to these growth forecasts on both the upside and the downside, although they seem to be skewed towards the downside, and have the potential to halt the gathering momentum of global GDP.
"The gradual strengthening of the global expansion that we projected in the February 2017 Review seems to be materialising. However, the new forecast has been constructed at a time of unusual uncertainty," NIESR fellow, Graham Hacche, said.
"There are significant risks that the gathering momentum of global growth could be derailed by policy missteps by major economies including protectionist trade policies and unrealistic budgets or a weakening of private sector confidence."
