The UK is expected to see steady but subdued economic growth over the next couple of years, according to the latest CBI economic forecast.

After a strong performance over the second half of last year, growth slowed in the first quarter of 2017 and a slower pace of growth is expected to continue.

The economy continues to face headwinds, with ongoing political uncertainty and Brexit negotiations starting, which will require careful navigation by business and the Government in the months ahead.

The CBI is now forecasting 1.6 per cent growth for 2017 and 1.4 per cent in 2018 compared with the previous forecast of 1.3 per cent and 1.1 per cent respectively.

The CBI says it is looking forward to working with the new Government and focusing on the economic fundamentals: getting Brexit right and investing in skills, innovation and infrastructure to help shore up the foundations of the economy.

Carolyn Fairbairn, CBI Director-General, said: "The UK economy has proved hardy in recent times, with firms up and down the UK getting on with what they do best by investing and creating jobs. Growth should be steady, if restrained, over the next couple of years as the pace of the economy shifts down a gear.

"While the country's exporters should emerge as a real catalyst of growth, rising inflation and stubbornly low wage growth mean that people are already starting to feel the pinch. Tighter purse strings mean slower household spending growth and uncertainty is likely to weigh on the minds of those making major investment decisions.

"So, after a frantic period in Westminster, this is the time for a renewed focus on the economic fundamentals of this country.

"Above all, the new government has the opportunity to signal loudly and clearly that Britain is a great place to do business - relentlessly focussing on investing in infrastructure, innovation and skills nationwide, while delivering a sensible and competitive tax and regulatory environment.

"Most important of all, we need to move much faster to fix the foundations of the UK economy, addressing our persistently underwhelming productivity performance. The new Government can breathe life into a new Industrial Strategy delivering a fair, innovative and competitive economy fit for the 21st century, raising living standards and spreading prosperity to all corners of the UK.

"And now Brexit negotiations are beginning, it will be essential that negotiators on both sides remain cool, calm and collected, in order to make rapid progress on what a successful new relationship will look like. Putting trade, jobs and people first by agreeing transition arrangements and guaranteeing EU citizens' rights early on would set the right tone.

"But the less likely a deal starts to look, the harder it will be for firms to recruit and retain talent as well as push the button on big investment decisions. We must get Brexit right."

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