EU hails economic growth but warns of UK uncertainty over Brexit

EU hails economic growth but warns of UK uncertainty over Brexit

The European Union's economic recovery is continuing, with steady growth expected this year and next, the bloc said - although it warned of uncertainty in Britain due to Brexit.

In its spring economic forecast, the European Commission said economic growth among the countries using the euro currency would reach 1.7% this year and 1.8% in 2018.

Growth in the full 28-nation EU is set to remain constant at 1.9% both years.

Economy Commissioner Pierre Moscovici welcomed the fact that Europe is entering its fifth year of growth and "that the high uncertainty that has characterised the past 12 months may be starting to ease".

However, he warned that "the euro area recovery in jobs and investment remains uneven. Tackling the causes of this divergence is the key challenge we must address in the months and years to come."

In Britain, growth is set to ease and inflation to rise, with business investment predicted to stagnate as companies remain unsure about the future ahead of Britain's EU exit in March 2019.

"Measures of investment intentions from recent surveys are soft and businesses are expected to defer investments in the face of uncertainty relating to the negotiations regarding the UK's withdrawal from the EU," the forecast said.

Britain's growth is expected to reach 1.8% in 2017 but will weaken due to fading household consumption as disposable income is squeezed by prices rising faster than wages.

More on this topic

Coveney: We are supportive of a flexible Brexit extensionCoveney: We are supportive of a flexible Brexit extension

Farmers ‘kept in dark about trade after Brexit’Farmers ‘kept in dark about trade after Brexit’

Varadkar backs UK request to extend Brexit deadlineVaradkar backs UK request to extend Brexit deadline

Boris Johnson tells Donald Tusk he does not want a Brexit delayBoris Johnson tells Donald Tusk he does not want a Brexit delay