UK economy growth to fall during 2015

Growth in the UK economy is expected to fall during 2015, according to industry experts.

Forecasting group EY Item Club has predicted a 2.4 per cent growth next year, down from the 3.1 per cent expected this year. It represents a significant drop from the forecasts released by the Bank of England, the Confederation of British Industry (CBI) and the International Monetary Fund.

The drop in growth for next year has been attributed to an upcoming election alongside political uncertainty. Continuing financial worries in the eurozone and the ongoing Ukraine conflict have also been linked to a drop in growth as companies become less eager to invest heavily over the coming year.

Paul Spencer, EY Item Club's chief economic adviser, provided minimal comfort for the UK's outlook for the next 12 months. He described the nation's export potential for the next year as "dreadful" adding that the economic rebalancing recorded in early 2014 could prove to be a "false dawn".

"The forecast for GDP growth is still relatively good. What has changed is the global risks surrounding the forecast and the headwinds facing investment by firms," Mr Spencer explained.

"Looming political uncertainty risks denting corporate confidence – the question now is how will these risks play out? I expect caution to become the order of the day."

The reduction of growth comes after the Office for National Statistics (ONS) stated that UK inflation had fallen to its lowest rate in five years. The report showed the Consumer Prices Index to have fallen to 1.2 per cent for September, dropping from the 1.5 per cent recorded a month earlier.

It was the lowest figure since September 2009 and prompted the Bank of England to resist the temptation to increase interest rates from their historic low.

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