BRITAIN'S economic growth is expected to slow sharply in 2020 due to the disruption caused by coronavirus, according to the British Chambers of Commerce.

The business group has downgraded its UK Gross Domestic Product expectations from 1.0 per cent to 0.8 per cent. Outside the 2008/9 financial crash, this is the weakest full year growth forecast since 1992, down sharply from last year's 1.4 per cent increase. UK GDP growth is expected to pick up in subsequent years: to 1.4 per cent in 2021 and 1.6 per cent in 2022.

The disruptive impact of Coronavirus is expected to weigh significantly on key drivers of UK GDP growth through the first half of 2020. A lack of clarity on the UK’s future trading relationship with the EU and other partners around the world and a struggling global economy is also predicted to limit UK’s near-term growth prospects:

UK export growth in 2020 is projected to be its weakest since 2009 as a subdued global economy, the impact of Coronavirus and uncertainty over future trading arrangements constrain export activity.

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Growth in household spending in 2020 is predicted to be at its slowest since 2011, as the effect of Coronavirus temporarily weakens consumer demand, despite historically low unemployment.

On the upside, historically strong levels of government spending - both observed in Budget 2020 and anticipated in the upcoming Spending Review and Autumn Budget – are expected to support the UK economy through the forecast period.

Measures announced by the Bank of England including lowering interest rates and steps to support business access to finance, are expected to help mitigate some of the impact of Coronavirus on the UK economy.

Adam Marshall, director general of the British Chambers of Commerce, said: "Coronavirus could further weaken an already stagnant UK economy, as many businesses are starting to report an impact on their cashflow and growth prospects.

“The Chancellor and the Bank of England have responded to the immediate challenge with measures to help firms hit by Coronavirus, and they must now ensure this support gets to businesses as quickly as possible.

"Securing new trading arrangements, taking real action to reduce the high upfront costs of doing business and putting spades in the ground on long-overdue infrastructure projects must be prioritised in order to secure our long-term economic prospects."