The U.K. economy will grow slower in 2016 and 2017 than previously thought, the Confederation of British Industry (CBI) has said. CBI is the top British employer’s organization.

In its new economic growth forecast based on GDP, CBI says the U.K. economy will grow by 2.3% in 2016 and 2.1% in 2017. The new estimates reflect a 0.3% step-down from the previous targets in each.

CBI’s downgrade of the economic growth comes nearly three months after Chancellor of the Exchequer, George Osborne, hinted about expected economic growth in 2016. According to CBI, the U.K.’s economic prospects have declined since Osborne made his comment in autumn.

Downgrade triggers

A series of factors influenced CBI’s economic outlook downgrade. The employers’ organization cites weakness in trade, investment and household spending as some of the factors. Additionally, the soft performance of the economy at the end of 2015 also adds to the gloom.

The 0.3% cut in growth prospects for 2016 and 2017 also has its roots in modest hikes in salaries, which is feared could keep household spending low. Additionally, inability to increase productivity levels faster is also threatening to dim economic growth and in the current and the coming year.

Keeping interest rates low

Because of anticipated poor economic growth, CBI sees the U.K. central bank holding interest rates at 0.5% for the balance of 2016. Such a measure could help spur economic growth and possibly see the economy grow faster than predicted.

OBR predictions could come down

The independent Office for Budget Responsibility (OBR) still has lofty economic growth prediction numbers. OBR is predicting the economy to grow 2.4% in 2016 and another 2.5% in 2017. However, CBI sees OBR’s numbers coming down as the reality sets in amid global economic rout. The economic slowdown in China and other emerging markets are other reasons the U.K. economic growth is expected to slow in 2016 and 2017.

Better than peers

Despite downgrading Britain’s economic growth outlook, CBI maintains that fastest-growing developed economy.