UK economy 'treading water' before Brexit: lobby group

Britain's economy is "treading water" ahead of Brexit, a major business lobby group warned Friday, and called for a "swift and comprehensive" EU trade deal.

The British Chambers of Commerce also cut its gross domestic product (GDP) growth forecast for next year to 1.2 percent from 1.3 percent.

However the BCC upgraded its 2017 guidance to 1.6 percent from 1.5 percent. "While some businesses report strong trading conditions, the UK economy as a whole is treading water, and there is no sign on the horizon of a return to healthier levels of growth," said BCC director general Adam Marshall.

"The rising upfront cost of doing business in the UK, the uncertainty around Brexit, and the constraints created by skills gaps and shoddy infrastructure collectively outweigh any benefit arising from the recent depreciation of sterling," he added.

The lobby group urged the government to focus efforts on trade talks in Brussels -- and the adoption of business-friendly measures in the government's budget due November.

"A comprehensive Brexit transition deal, and a swift shift to focus on the future UK-EU trade relationship, are needed this autumn," added Marshall.

Separately on Friday, official data from the Office for National Statistics painted a mixed picture of Britain's economy. The manufacturing sector grew by 0.5 percent in July, its fastest pace for a year, driven partly by the production of new cars.

However, Britain's deficit in goods and services, or the gap between exports and imports, was static at £2.9 billion ($3.8 billion, 3.2 billion euros) in July.

Construction output sank for a fourth month in a row, down 0.9 percent from June.