Trade and investment to pick up the baton

Consumer spending growth looks set to slow further this year as the real pay squeeze intensifies. But this should be offset by a stronger contribution from net trade and investment. There is a risk that uncertainty thrown up by the Brexit vote and the General Election starts to bite, but we think that the economy should continue to weather political uncertainty relatively well. As a result, we expect GDP growth of around 1.8% this year, accelerating to about 2.3% in 2018.