Dec 12, Kathmandu - The British Chambers of Commerce (BCC) has projected that the UK economy will experience slow growth in the upcoming year.

The November budget is not expected to significantly accelerate economic momentum, the BCC stated.

According to the BCC's forecast, the UK's Gross Domestic Product (GDP) is anticipated to grow by 1.2% in 2026, which is lower than the 1.4% growth rate projected for 2025.

Business investments are also expected to remain subdued; investments that are currently forecasted to grow by 3% in 2025 are predicted to increase by only 0.9% in 2026.

The pace of trade growth is also expected to remain sluggish, with export growth decreasing from 3% to 1.8%, and import growth being limited to 1.4% from 3.8%.

While average earnings are expected to increase gradually, the unemployment rate may rise to 5.1%.

Cost pressures, low productivity, and limited production capacity are likely to constrain companies' hiring abilities.

However, slow wage growth and a sluggish labor market are expected to help contain inflation to some extent, the BCC noted.

David Bharier, Head of Research at the BCC, stated, “The UK economy is advancing at a slow pace, which will pose challenges in financial and political sectors. Small and medium-sized businesses are expected to face difficulties in 2026, with challenges in investment and export growth.”

Vicky Pryce, Chair of the BCC's Economic Advisory Council, added, “If the budget includes necessary growth-boosting measures, businesses will still face a challenging environment next year. Rising unemployment will reduce consumer spending, and companies are likely to experience further hardships.”