S&P Global sees near 10% plunge in UK economy, warns on Brexit

FILE PHOTO: A man walks past a mural outside a closed music venue, amid the outbreak of the coronavirus disease (COVID-19) in Manchester, Britain, August 11, 2020. REUTERS/Phil Noble

LONDON (Reuters) - Credit rating agency S&P Global cut its economic growth forecasts for Britain on Thursday, saying the country’s economy was now likely to slump almost 10% this year, although it also revised up the 2021 bounce to nearly 8%.

The firm said it expected UK GDP to now drop 9.7% compared to its previous forecast of an 8.1% fall in June, while next year’s rebound would be 7.9% versus 6.5% previously.

It added however that “a hard Brexit leading to new import and export tariffs, as well as non-tariff trade barriers” would add another layer of challenge for European companies, and be “especially detrimental for the UK economy”.

Reporting by Marc Jones; Editing by Rachel Armstrong