UK economy hit by ‘notable’ slowdown as it grows 0.3pc
THE UK economy suffered a “notable” slowdown in the first half of the year, official data show.
The British economy grew by 0.3pc in the three months to June, fractionally better than the 0.2pc performance in the first quarter.
The slight increase in growth was driven primarily by the services sector, while construction and production acted as a drag.
“The economy has experienced a notable slowdown in the first half of this year,” said Darren Morgan, the head of national accounts at the Office for National Statistics (ONS).
“While services such as retail, and film production and distribution showed some improvement in the second quarter, a weaker performance from construction and manufacturing pulled down overall growth.”
The UK economy has proved more resilient to the effects of the Brexit vote than initially expected by economists, although they anticipate rising inflation to take its toll on both consumer confidence and spending.
The data released by the ONS show that growth in overall consumer prices, including owner occupiers’ housing costs, fell back slightly in June, but real wages, including bonuses fell by 0.7pc in the three months to May compared with a year earlier. That was the biggest fall since August 2014. Chancellor of the Exchequer Philip Hammond said the UK government could not be complacent about economic growth and needed to boost productivity and investment.
“Our economy has grown continuously for four-and-ahalf years,” Mr Hammond said.
“We can be proud of that, but we are not complacent. We need to focus on restoring productivity growth to deliver higher wages and living standards for people across the country.”
Analysts said the data suggested the full year growth figure could disappoint, and that it means a hike in interest rates by the Bank of England would be unlikely.