OECD says UK economy to slow over Brexit 'uncertainty'

By Ahmet Gurhan Kartal

LONDON (AA) - Bad news for the U.K. economy from the OECD broke on Wednesday just a day before British voters go to the polls in a snap general election.

The U.K. economy will slow down in 2017 and 2018 due to uncertainty surrounding the Brexit negotiations, the OECD projected.

According to the intergovernmental economic organization, U.K. growth forecasts are 1.6 percent for 2017 and one percent for 2018.

“The [Brexit] uncertainty, and the assumed outcome, is projected to undermine spending, in particular investment.

“Policies have supported private confidence and consumption, but household spending is projected to ease as the combination of a weakening labor market and higher inflation reduces real wage growth,” the OECD said.

Underlining that U.K. inflation had exceeded a target of 2 percent after reflecting exchange rate depreciation following the Brexit referendum last year, the OECD said the British budget deficit was projected to remain generally unchanged in 2017.

The body said the U.K. should consider “fiscal initiatives” to increase public investment.