The economy is growing – but at slower rate than 2015

BRITISH business growth rebounded in the three months to August shaking off some of the European Union referendum blues, but expansion is still far below the rate seen last year.

The latest survey from the CBI will fuel the simmering row over how well the economy is bearing up after the Brexit vote amid a flurry of conflicting data.

The CBI’s growth indicator stood at +8 per cent, slightly up from the +5 per cent figure recorded in July.

The stronger figures will be taken as a sign that the economy remains resilient despite the June vote to leave the EU.

But the index remains at low levels compared to the double-digit positive numbers seen throughout 2015.

The CBI figures come hot on the heels of the latest Purchasing Managers Index figures for manufacturing, issued by research group IHS Markit last week. These showed a sudden recovery at factories following the sharp slump seen after the Brexit vote.

The PMI construction figures on Friday showed a rebound from the July doldrums, although they indicated that the building industry is still shrinking.

The third key PMI measure – covering the services sector and regarded as the most important indicator – will be issued tomorrow.

Before the referendum the Treasury had warned that an Out vote could mean the economy shrinks by 0.1 per cent in the following three months.

Patrick Minford, professor of applied economics at Cardiff Business School and one of the Economists for Brexit, said the Treasury forecasts were ‘completely dead and buried’. He added: ‘They ought to have the most red faces and be eating the

most humble of pies.’ Minford said he expected third quarter growth to be strong at around 0.6 per cent.

But Chris Williamson, chief economist at Markit – the research group which compiles the PMI figures – argued that the Treasury forecast might still prove to be accurate.

BRITAIN’S fastest growing companies want membership of the European single market and access to EU workers to be the Government’s top priorities in Brexit negotiations, according to a survey by private equity firm ECI.

Meanwhile, the British Chambers of Commerce is tomorrow set to release a survey of 800 UK firms employing EU staff and that is also expected to highlight fears over the continuing availability of EU workers.