United Kingdom economy sees pick-up in growth

Britain’s economy has been hit by fears around the impact of the country leaving the European Union. Thomas Trutschel

Britain’s economy has been hit by fears around the impact of the country leaving the European Union. Thomas Trutschel

That figure also represented a dramatic slowdown from the 0.7 per cent growth in the final quarter of 2016, and the 0.5 per cent growth in the quarter immediately following the referendum.

At 4:30 am ET Wednesday, the Office for National Statistics publishes U.K. GDP data for the second quarter.

Even with the improvement in retailing in the second quarter, the sector posted flat growth over the six months through June.

He added: 'Our projections for long-term British growth are actually based on a pretty optimistic assessment of how the negotiations are likely to turn out, so if things are worse than that it will turn out to be correspondingly worse for the British economy'. Meanwhile the film industry delivered a 0.07 percentage point contribution to growth, as the sector's output expanded by 8.2 per cent.

The biggest single contributor to headline GDP growth was the retail trade, which saw sales bounce back during a warmer second quarter.

He added that: "Yesterday a CBI survey showed United Kingdom 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".

Earlier this week the International Monetary Fund (IMF) slashed its growth forecast for the United Kingdom, saying that it now expects the country's economy to grow by 1.7 per cent this year compared to a previous forecast of 2 per cent.

Overall, the data - which was in line with consensus forecasts - marks a slight improvement from the 0.2 per cent expansion in the three months to March, which made the United Kingdom the worst performing economy in the European Union at the start of the year.

"Today's GDP figures showed growth remains largely anaemic", he said.

The IMF now expects UK GDP to grow by 1.7% instead of its previous projection of 2%.

Until the beginning of 2017, the United Kingdom economy fared better than all but the most optimistic of forecasters imagined in the immediate aftermath of the Brexit referendum, confounding predictions of an immediate recession, and virtually ignoring any uncertainty over the future.

"By my reckoning this is the weakest first half of the year that we have seen for the economy since 2012 - so in five years".

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