Europe vote ‘did not have economic impact’

THE OFFICE for National Statistics has cast doubt on the evidence of an economic impact from the referendum on leaving the European Union.

The Office for National Statistics (ONS) said gross domestic product (GDP) grew by 0.6 per cent in the second quarter, up from 0.4 per cent in the first three months of 2016.

In its second estimate for the period, the ONS said: “There is very little anecdotal evidence at present to suggest that the referendum has had an impact on GDP in Quarter 2 2016.”

Business investment appeared to show no impact from uncertainty ahead of the EU referendum vote, increasing 0.5 per cent in the second quarter compared with the first quarter.

Household spending also shrugged off Brexit jitters to grow 0.9 per cent in the three months to June, rising from 0.7 per cent in the quarter before.

Joe Grice, ONS chief economist, said the second quarter GDP result reinforced the picture that the economy grew strongly in April, but remained flat in May and June.

“Business investment grew in the second quarter, partly thanks to companies spending on transport equipment such as cars and planes.

“However, levels of investment remained lower than at the same period last year.

“Our survey returns, which include the period leading up to and immediately following the referendum, show no sign so far of uncertainty having significantly affected investment or GDP,” he said.

Many economists had tipped the UK economy to maintain momentum ahead of Britain’s vote to leave the European Union.

A recent slew of official data covering the first month after the Brexit vote suggests the British economy is also faring better than initially expected.

Warm weather spurred retail sales towards a higher-than-expected rise of 1.4 per cent in July.

Consumer confidence has also risen at its fastest monthly rate in three-and-a-half years in August as Brexit jitters ease, according to the YouGov/Cebr Consumer Confidence Index.