Economic growth slows as households tighten belts
BRITAIN’S economic growth slowed dramatically at the start of the year as millions of households tightened their belts amid fears of a living standards squeeze, figures revealed today. In a blow to Chancellor Philip Hammond just weeks before the General Election, GDP grew by just 0.3 per cent in the first three months of 2017.
The figure was sharply down on 0.7 per cent from the end of 2016 and below City expectations of 0.4 per cent growth.
A slump on the High Street was the big gest single blow to economic growth. Figures from the Office for National Statistics showed that output from the distribution, hotels and restaurants sector — which includes the retail industry — fell by 0.5 per cent in the quarter, compared with a two per cent rise in the previous three months.
Economists are warning that rising inflation, partly blamed on the postBrexit vote slump in the value of the Pound, is set to take more steam out of the economy.
Responding to the gloomier-thanexpected news, Mr Hammond stressed that the British economy “is resilient” and warned of “tough and complex” Brexit negotiations ahead.
“That’s why we need strong and running in April, dragging the year-onyear growth rate down to 2.6 per cent, the weakest since June 2013.
Accelerating inflation following the “Brexit devaluation” means that the cost of living is outstripping earnings for the first time since 2014, and squeezing the spending power of shoppers.
A number of major retail chiefs, including Next boss Lord Wolfson, have warned of tough conditions ahead as consumers rein in their spending.
The dominant services sector, which accounts for more than three quarters of the economy, expanded by just