Britain's economy has been fairly resilient since the vote last June to leave the EU. Sterling has plummeted to lows not seen for 31 years, but economists have underlined that the currency has acted like a pressure valve, giving a vital boost to exporters in a time of economic stress.
However, some notable voices are now predicting a downturn for the U.K. as rising inflation starts to affect consumer spending in Britain. In a recent UBS survey of 2,000 respondents, the results showed a "dramatic reduction in consumer discretionary income and intention to spend", with the biggest drop in sentiment related to clothing. UBS added that while consumer confidence had remained steady so far, they expected that with real wages set to fall, discretionary spend would follow.
Richard Portes, professor of economics at London Business School, told CNBC Friday that the euro area's economy has been picking up, but trouble should be expected for the British economy.
"We're all going to be – both on the U.K. side and the EU-27 side – we're all going to be worse off. There's no way that you can avoid the shocks, the negative shocks that will come from breaking the past trade, investment and so forth relationships that we've had," he said at the same event in Italy.
"I think the (Bank of England) is going to be facing a hard choice towards the end of this year, because I think that consumer expenditure will be slowing down, investment will not be picking up and inflation will be picking up," he added.
—CNBC's Alex Gibbs contributed to this article.
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