Key facts
- The UK economy is forecast to grow 1.0% in 2026, with business investment expected to contract by 0.2% this year.
- Inflation is projected to peak at 3.6% by the end of the year.
- Unemployment is forecast to reach 5.0% by the end of 2026.
- The British Chambers of Commerce (BCC) has warned that the UK economy is stuck in the 'slow lane'.
The UK economy is set to remain in a 'slow lane' with business investment expected to contract, according to the British Chambers of Commerce (BCC). The BCC has marginally upgraded its 2026 growth forecast to 1.0% but warned that investment would make a diminishing contribution. Business investment is predicted to contract by 0.2% this year before recovering to 0.4% growth in 2027. Inflation is projected to peak at 3.6% by year-end, and unemployment is expected to reach 5.0% by the end of 2026. The BCC's forecasts are more pessimistic than those of several City firms and independent organizations. The Office for Budget Responsibility will revise its economic forecasts ahead of the Budget.