UK shows growth in Q3
>GDP expands by 0.5% despite fears of Brexit vote shock, says poll
LONDON: Britain’s economy barely slowed in the third quarter despite the Brexit vote shock, further diminishing the chance of a fresh interest rate cut by the Bank of England next week.
Gross Domestic Product (GDP) expanded by 0.5% in the July-September period, less rapid than the unusually strong growth of 0.7% seen in the second quarter but comfortably above a median forecast of 0.3% in a Reuters poll of economists.
Compared with the third quarter of last year, growth picked up to 2.3%, the strongest pace in more than a year, according to the preliminary figures from the Office for National Statistics (ONS).
“There is little evidence of a pronounced effect in the immediate aftermath of the vote,” ONS chief economist Joe Grice said, adding that growth was in line with the pattern since 2015.
Supporters of Brexit are likely to say the figures back the claims they made during the referendum campaign that warnings of a big hit to Britain’s economy from a vote to leave the EU were little more than scaremongering.
The stronger-than-expected growth in the third quarter was only due to the country’s dominant services sector which saw rapid growth in film and television production and distribution. The ONS linked the pick-up to strong box-office receipts in July when the latest releases in the Jason Bourne and Star Trek series hit the screens along with other blockbusters.
The figures provide the first broad estimate of the size of the hit to Britain’s economy from the referendum decision in June to leave the European Union.
Many economists originally expected a “Leave” vote to push the economy quickly into a shallow recession. – Reuters