Ratings agency Moody’s forecasts the UK will avoid a recession in the wake of the Brexit vote due to the lower pound and monetary policy supporting growth.
The Telegraph reports while Moody’s expects UK growth to slow, it is still predicting the economy will grow by 1.5 per cent this year and 1.2 per cent in 2017.
The rating agency is not forecasting a major fall in house prices, and “limited Brexit-related spillovers to the eurozone.”
Moody’s senior analyst Madhavi Bokil says: “Uncertainty around the future of the economy outside the common market will continue to dampen business investment and consumer spending, as businesses hold back on hiring and making long-term investments, and as consumers postpone large spending decisions.
“However, the fall in the sterling will mitigate some of the negative effect in the short term by providing a boost to exports.
“Our baseline growth forecasts also incorporate the assumption that some fiscal loosening and monetary policy accommodation will support the economy, limiting the slowdown in growth.”