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Ibec cuts forecast for growth and warns over Brexit preparedness

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British Prime Minister Theresa May. Photo: Stefan Rousseau/PA Wire

British Prime Minister Theresa May. Photo: Stefan Rousseau/PA Wire

PA

British Prime Minister Theresa May. Photo: Stefan Rousseau/PA Wire

Employers' group Ibec has cut its outlook for economic growth to 4.1pc this year from a forecast of 4.8pc, made in the first quarter of last year, and warned the Government needs to step up its preparations for Brexit.

It warned that the forecasts were based on the assumption that the UK would strike a deal to leave the EU and would not crash out at the end of March.

"We expect that the economy will continue to grow strongly in 2019, however, this growth will be weaker than in recent years as we are now at a mature phase of the business cycle with the economy close to capacity," Ibec said in a report issued today.

The Department of Finance forecast is for 4.2pc growth.

Members of the business body face difficulties from a weak pound and the uncertainty over Brexit as UK Prime Minister Theresa May (right) has said the choice is her deal or crashing out of the EU.

"It is crucial that Government now seeks to ramp up no-deal planning by putting further supports for enterprise stabilisation, cashflow and diversification in place," Ibec said. It noted the increasing dependence on corporate tax receipts which last year helped push the budget to a small surplus, against expectations of a deficit.

"In total, the Irish Exchequer has collected €14.3bn since 2015 which it never expected to materialise," Ibec said.

Growth is expected to slow even further in 2020, to just 2.9pc and Ibec said its members were finding it harder to recruit with record numbers now in work.

"Ibec's survey of 339 HR managers shows that wages rose by around 2.5pc in 2018 and are expected to rise further by 2.5pc in 2019," it said.

Irish Independent