Top Stories
Top Stories
Europe News

'Fat and lazy' UK's growth forecasts downgraded

BCC downgrades UK's growth forecasts

Just days after the U.K.'s trade secretary branded the country "too lazy and too fat," Britain's leading business body has downgraded its U.K. growth forecasts.

The British Chambers of Commerce added insult on Monday to injury caused by the pro-Brexit Trade Secretary Liam Fox's remarks over the weekend Saturday by predicting gross domestic product growth of 1.8 percent in 2016, 1 percent in 2017 and 1.8 percent in 2018.

The BCC's forecasts come in the wake of the vote to leave the European Union (EU) and were lowered from previous robust estimates of 2.2 percent growth this year, 2.3 percent in 2017 and 2.4 percent in 2018.

In its first economic forecast since the EU referendum in June, the BCC said that weaker consumer spending and a large fall in investment were the main reasons for the downgrade. The U.K. has yet to formally trigger the exit process with the EU, causing uncertainty over the real effect that a Brexit will have on business confidence and consumption.

Still, the BCC thought that Britain might just escape the recession that was widely predicted by anti-Brexit campaign.

Richard Baker/in Pictures via Getty Images

"The uncertainty surrounding the U.K.'s long-term political arrangements with the EU, as well as the timeline over which any actions will take place, are expected to dampen growth prospects towards the end of 2016 and over 2017. Despite these issues, the U.K. is expected to skirt with, but avoid, recession," the BCC said in its report on Monday, adding that "the post-referendum slide in sterling is expected to help improve the U.K.'s net trade position."

The downgrades to the BCC's forecast for U.K. GDP growth imply that the U.K. economy will be £43.8 billion smaller at the end of the forecast period than previously predicted. In addition, the BCC noted that if the GDP growth forecast for 2017 (of 1 percent) is realized it would be the weakest rate of growth since 2009.

'Fat and lazy'

The BCC's weaker growth forecasts come hot on the heels of another insult to the U.K.'s economic dignity. On Saturday, Trade Secretary Liam Fox - who's in charge of promoting international trade with Britain in the wake of the Brexit vote - caused a furore this weekend after he said Britain was "not the free-trading nation it once was. We have become too lazy, and too fat on our successes in previous generations."

Fox was recorded making the comments at a Conservative campaign group's event by The Times newspaper. The biggest stir was caused by Fox saying that there were "companies who could be contributing to our national prosperity - but choose not to because it might be too difficult or too time-consuming or because they can't play golf on a Friday afternoon - we've got to be saying to them if you want to share in the prosperity of our country you have a duty to contribute to the prosperity of our country."

Do Liam Fox's comments about British execs hold water?

Defending the country's business community, Bronek Masojada, chief executive of insurance firm Hiscox, told CNBC that a survey conducted by the firm found that business owners knew the value of hard work.

"We asked entrepreneurs what they needed to succeed and the number one (response) was the willingness to work hard, that was ahead of determination and actual technical knowledge," he told CNBC Europe's "Squawk Box" Monday.

He said that British politicians were far-removed from the daily lives of people running businesses in the U.K. "I think there's a degree of (the fact that) many politicians have never worked in frontline business and they don't realize that whatever anyone says of working 40-50 hours, it's a 'never-off' environment nowadays. Over the weekend, you have your emails and telephone, it's a never-off society," he said.

With regards to Brexit, Hiscox's survey of 4,000 small businesses in the U.K., Europe and the U.S. published on Monday found that only 30 percent were worried about the impact of the vote with the biggest concern being a lack of access to export markets.

"(Businesses) want to know what the terms of trade are going to be like with the EU 27 (EU's members) - that's 400 million people, that's very important to us. Also it would be very helpful if the government could set out how it's going to improve on the current trading relationships that we what with different countries," Masojada said.

Follow CNBC International on Twitter and Facebook.