British companies are ready to shrink their investments in 2019 with the highest volume in 10 years, shows the new data from the British Chamber of Commerce. This happens on the background of approaching UK exit from the European Union, and even a possible Brexit deal will not help to improve the market sentiment.

Business investment is expected to decline by 1% per year. At the same time, weaker investments are weighing on productivity, which in turn puts brakes on wage growth and the overall performance of the economy.

“Political inactivity is already having economic consequences, with many companies already suspending decisions about investing and recruiting new staff”, said the Director General of the British Chamber of Commerce, Adam Marshall. According to him, the investments of some companies that have decided to move them out of the country may never return to the British economy anymore.

In 2018, investment in business declined throughout the four quarters – the longest run of the global financial crisis.

While Finance Minister Philip Hammond expects acceleration, once the Brexit deal is concluded, the Chamber of Commerce says that diverting funds for Hard Brexit, the high initial business expenses in the UK, and questions about future bilateral relations with the EU will limit the rapid recovery of the level of investment.

According to the data, investments will increase by 0.6% next year and by 1.1% in 2021.

The House of Commons also lowered its overall forecast for the British economy’s growth to 1.2% this year from 1.3% on previous expectations – in line with recent changes in the expectations of the Central Bank of England. This will be the weakest growth in a decade, which also reflects the slowdown in the global economy as a whole.

An acceleration to 1.3% is expected in 2020 and 1.4% in 2021.