‘Anaemic’ GDP growth recorded for Q2 2017
Today’s GDP figures reveal growth came in at 0.3% in Q2, up from 0.2% recorded in the first three months of the year, according to the Office for National Statistics (ONS).
The slight upward trend was helped by agriculture and services, but was held back by production, manufacturing and construction.
Compared to the same three month period last year, GDP grew 0.6% from Q1 of 2016.
Despite lacklustre growth so far this year, Ben Brettell, senior economist at Hargreaves Lansdown, said there are tentative signs that the economy might improve in the second half.
“Last week saw news that retail sales rose ahead of expectations, indicating the consumer may still have some petrol in the tank – though the Bank of England has expressed caution over rising levels of personal debt. Meanwhile inflation began to recede, which if it continues in the coming months could end the squeeze on real incomes.
“Yesterday a CBI survey showed UK factories increasing output at the fastest rate since the mid-1990s, suggesting manufacturing – which makes up around ten percent of the economy – might make a meaningful contribution to overall economic growth in the third and fourth quarters.”
‘Outlook for economy is far from rosy’
Nathan Sweeney, senior investment manager at Architas said the latest GDP figures show the UK economy is flat lining and will have those opposed to Brexit warning this will only get worse.
However, he added: “The effects or potential impacts of Brexit are not the underlying cause of the weakness in data. The reality is the UK economy has been slowing since well before the Brexit vote took place. And it has been trending down for a number of years.
“The bigger picture is that there has been a significant failure by the central bank to stimulate growth in the UK economy. It is clear that the central bank is now stepping back and will begin to withdraw its monetary stimulus in the form of quantitative easing, which while it staved off a full-blown crisis has not succeeded in boosting long-term growth. We are experiencing subdued low growth and that will persist unless we see the government step in to stimulate the economy.”
Sweeney added that with the uncertainty around Brexit negotiations and the weak data on growth, “the outlook for the UK economy is far from rosy”.