ONS leaves UK GDP forecast unrevised despite Brexit concerns
According to the ONS there is “very little anecdotal evidence” at present to suggest Brexit had an impact on second quarter GDP growth and as such it left its preliminary 0.6% growth estimate for economic expansion (made in July) unrevised.
Growth in both consumer spending and business investment helped sustain the economy according to the latest estimate. Again despite Brexit concerns, consumer spending jumped 0.9% from the previous quarter, the fastest pace since 2014.
Having fallen in the first three months of the year, business investment meanwhile increased 0.5% from the first quarter.
Commenting on business investment figures, Kevin Caley, founder and chairman of P2P lender ThinCats, said: “Today’s upturn in business investment figures is surprising, given the economic and political uncertainty that dominated the second quarter of the year. The 0.5% rise from Q1 suggests that UK businesses were better positioned in the run-up to the referendum than previously thought.
“While this is positive news, it doesn’t change the fact that investment in UK business, especially into small and medium sized enterprises that make up the majority of the sector, remains inadequate. This is why we’ve seen an explosion in the popularity of alternative sources of finance.”
The 0.6% estimated growth in the second quarter of the year builds on the 0.6% growth recorded in the first quarter (January to March), while in the period between the second quarter of 2015 and second quarter of 2016 the UK economy has expanded in volume terms by 2.2%.
A third and final estimate of how the economy grew in the second quarter of this year will be released next month.