Brexit uncertainty will hold UK GDP growth back, says OBR

Forecaster says weak business investment and rising inflation will affect economy but Britain will dodge recession

Weaker business spending and a squeeze on consumers from higher inflation will dent the UK economy next year, but warnings for a post-referendum recession should prove unfounded, according to the government's independent forecasters.

The Office for Budget Responsibility was forced to revise down its prediction made before the Brexit vote that GDP would rise 2.2% next year. It now sees the economy expanding by only 1.4% and warns there will be a knock-on effect on the public finances.

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