The Institute of Chartered Accountants in England and Wales (ICAEW) has warned that a decision to reject Prime Minister Theresa May's Brexit deal will 'undermine the chance of stronger economic growth' in 2019.
In its latest economic forecast, the ICAEW predicted that the UK economy will grow by 1.6% over the coming year. It believes falling inflation, increasing domestic spending power, fiscal loosening and additional business investment in response to a Brexit deal will help to ensure the UK economy grows in 2019. However, a so-called 'hard Brexit' could 'put the brakes on modest growth', according to the Institute.
Furthermore, the ICAEW suggested that business investment will fall by 0.4% over 2018 as a whole. However, this figure could change during 2019: the ICAEW predicts that business investment will increase by 0.5% next year.
Michael Izza, Chief Executive of the ICAEW, said: 'The need for greater stability cannot be overstated. Businesses have been unable to plan ahead, and that is a difficult environment for investment.
'It is crucial that we avoid a disorderly exit and the activation of costly and disruptive contingency measures.
'The potential adverse impacts on business and the wider economy could be severe, and are not helped by the decision to delay the vote on the withdrawal agreement.'