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CBI expects UK economy to lag behind peers as Brexit looms

Britain's economy is expected to grow by 1.4% in 2018, lagging behind the growth forecasts of 2.8% in the U.S. and 2.2% in the eurozone, Reuters reported, citing employers' group the Confederation of British Industry.

The CBI said Britain dropped from being the fastest-growing economy in the G-7 to its slowest growth in 2017 when the value of the pound fell after the Brexit vote in 2016. Companies turned cautious about investing amid the uncertainty caused by Brexit.

This year's forecast growth is a slight revision from CBI's earlier forecast of 1.5% for 2018 as unusually cold weather gave a weak start to the economy in 2018, said CBI. The group expects growth to further weaken to 1.3% in 2019, when it will again lag behind the U.S. and the eurozone.

Prior to the Brexit vote, the CBI argued that opting to stay within the EU would be favorable for the British economy.

More members plan to spend more on automation, robotics and training to ease skill shortages, said CBI Chief Economist Rain Newton-Smith.

"But at the same time there's a huge amount of uncertainty in a lot of sectors about what our future relationship with the EU will be," she said.

"That means it's just harder to make those very long-term, capital-intensive decisions. Businesses are still holding back."