
The ICAEW, which represents around 144,000 chartered accountants worldwide, said it had downgraded its latest growth forecast from 2.5 per cent to 2.4 per cent for this year.
It said British firms were “scaling back growth in capital spending” because of concerns about which party or parties will form the next government and what its policy towards business will be. It added: “In light of continuing problems in the euro zone and a general election ahead, businesses are exercising caution. This is hampering efforts to build a trade and investment-led recovery.” ICAEW expects business investment to slow further in the weeks ahead particularly in the oil and gas industry, which has been battered by plunging prices in recent months. Businesses were also reporting skills shortages greater than experienced in recent years which could further constrain growth. In contrast, the ICAEW added, British consumers were “leading the economic recovery” boosted by the benefits of low inflation, lower oil and commodity prices and above average inflation wage growth which will see the average employee nearly ?400 better off this year. The unemployment rate was also improving with the ICAEW forecasting an average of 5.2 per cent in 2015 in line with the level seen before the financial crisis and an improvement on its latest forecast of 5.5 per cent. Despite the optimism the ICAEW warned that “policy makers should look to avoid rising levels of consumer debt to ensure the UK does not return to a similar situation before the financial crisis”. Read more about the 2015 general election:- What the next UK government should learn from British SMEs’ frustrations
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