BCC Predicts Weak UK Economy as Energy Costs Bite

The British Chambers of Commerce (BCC) Economic Forecast paints an uncertain outlook for the UK economy. Despite being more resilient in Q2 than expected, higher energy and business costs are likely to keep growth weak this year and next.

GDP is anticipated to grow by 1% in 2026, which is only marginally better than the BCC's previous forecast (0.9%). The economy was more resilient than expected in the first six months of this year, but growth remains subdued, boosted by private consumption and weighted towards services industries.

The BCC is forecasting business investment to contract by 0.2% in 2026, before recovering to growth of 0.4% in 2027. CPI inflation is expected to stay above target until the end of the forecast period, peaking at 3.6% in Q4 this year.

David Bharier, Deputy Director Economics and Insights at the British Chambers of Commerce, stated 'Our latest forecast paints an uncertain outlook for the UK economy.' He noted that growth remains subdued and firms have absorbed another major geopolitical shock, with businesses facing high domestic cost pressures.