UK econ­omy hit by ‘no­table’ slow­down as it grows 0.3pc

Irish Independent - Business Week - - BUSINESSWEEK - Colm Kelpie JOHN MUL­LI­GAN

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.

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