The European Commission announced today that the euro zone is set to experience a decrease in growth this year, while Britain’s economy will be cut in half by 2018.

The Commission said the reason for the uncertainty surrounding the euro zone might be due to U.S President Trump and his “still-to-be-clarified” intentions in “key policy areas”.

The Commission also spoke of other political risks the bloc is likely to face during the year, such as the consequences of Brexit negotiations and general elections taking place in a number of European Union member countries.

The uncertainty surrounding President Trump's key policies may have an effect on UK expansion and the euro zone / gettyimages
The uncertainty surrounding President Trump’s key policies may have an effect on Britain’s economic growth / GETTY

The political tumult of Brexit is also expected to affect Britain’s gross domestic product (GDP) growth rate. This year British GDP is forecast to decline to 1.5 per cent, from 2.0 per cent in 2016, and is predicted to fall to 1.2 per cent by next year.

The European Commission said: “[Britain] is likely to be adversely affected by persisting uncertainty while private consumption growth is projected to weaken as growth in real disposable income declines.”

However, estimates for British economy are better than previous figures announced by the Commission. Predictions set growth at 1.0 per cent this year, compared to 1.9 per cent in 2016. The 2018 forecast remains unchanged.

The EU executive forecast that growth in the 19 countries which share the euro currency would slow to 1.6 per cent from 1.7 per cent in 2016.

In November last year the euro zone GDP was estimated to grow by 1.5 per cent in 2017 and 1.7 per cent in 2018. A “better-than-expected performance in the second half of 2016 and a rather robust start into 2017,” brought about this revision, according the Commission.

In addition, consumer prices in the euro zone are expected to rise in response to surging inflation. Figures are forecast to grow to 1.7 per cent compared to 0.2 per cent last year.

The Commission’s vice president Valdis Dombrovskis has urged eurozone states to continue implementing structural reforms.

“With inflation picking up from low levels, we cannot expect current monetary stimulus to last forever,” he said.