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revealed that Britain’s “resilient” economy grew faster than expected in the aftermath of the referendum.
The nation’s GDP rose by 0.5 per cent in the three months from July to September, a slowdown from the 0.7 per cent in the previous quarter but far better than the 0.3 per cent forecast by the City.
The strong rise — driven by Britain’s surging services sector — makes it less likely that Britain will slip into “Brecession” and also reduces the chance of a further cut in interest rates from the Bank of England next month. However, some economists said that the true test of the impact of Brexit will not come until Article 50 is invoked next year.
Chancellor Philip Hammond welcomed the rise, saying: “The fundamentals of the UK economy are strong, and today’s data show that the economy is resilient. We are moving into a period of negotiations with the EU and we are determined to get the very best deal for households and businesses.”
It was the 15th consecutive quarter of growth for the economy, now 8.2 per cent bigger than the last GDP peak in early 2008 before the financial crash.
The data from the Office for National Statistics showed the services sector, which accounts for about 80 per cent of economic output, grew by 0.8 per cent. There was particularly strong growth from industries centred in and around London including film, video and TV programme production, sound recording, music publishing and computer programming.
However other parts of the economy did less well, with manufacturing down by one per cent and construction decreasing by 1.4 per cent.
Economists said the economy is likely to have been boosted by strong consumer spending over the summer but warned that rising inflation fuelled by rising import prices could snuff this out over the winter.
Nina Skero, managing economist at London forecaster the Centre for Economics and Business Research, said: “As a weaker pound contributes to higher import prices and in turn a sharp rise in inflation, consumers will feel the squeeze. A slight rise in unemployment and lower consumer confidence will also encourage households to cut back on spending.”
TUC general secretary Frances O’Grady said: “These figures show there’s no room for complacency. British manufacturing is still struggling.”
John Hawksworth, chief economist at consulting giant PwC, said: “Overall, it looks like the economic impact of Brexit is more likely to be a gradual drag on growth over the next few years as negotiations with the EU proceed, rather than a short, sharp shock.”
Meanwhile, a Government minister warned that prices would rise after the sharp decline in the value of sterling — and that the public had been warned of this risk before the June 23 vote.
“Consumers are going to start to see rising prices and there’s nothing we can do about that,” said international trade minister Mark Garnier. “That was a well-predicted effect of Brexit.”
revealed that Britain’s “resilient” economy grew faster than expected in the aftermath of the referendum.
The nation’s GDP rose by 0.5 per cent in the three months from July to September, a slowdown from the 0.7 per cent in the previous quarter but far better than the 0.3 per cent forecast by the City.
The strong rise — driven by Britain’s surging services sector — makes it less likely that Britain will slip into “Brecession” and also reduces the chance of a further cut in interest rates from the Bank of England next month. However, some economists said that the true test of the impact of Brexit will not come until Article 50 is invoked next year.
Chancellor Philip Hammond welcomed the rise, saying: “The fundamentals of the UK economy are strong, and today’s data show that the economy is resilient. We are moving into a period of negotiations with the EU and we are determined to get the very best deal for households and businesses.”
It was the 15th consecutive quarter of growth for the economy, now 8.2 per cent bigger than the last GDP peak in early 2008 before the financial crash.
The data from the Office for National Statistics showed the services sector, which accounts for about 80 per cent of economic output, grew by 0.8 per cent. There was particularly strong growth from industries centred in and around London including film, video and TV programme production, sound recording, music publishing and computer programming.
However other parts of the economy did less well, with manufacturing down by one per cent and construction decreasing by 1.4 per cent.
Economists said the economy is likely to have been boosted by strong consumer spending over the summer but warned that rising inflation fuelled by rising import prices could snuff this out over the winter.
Nina Skero, managing economist at London forecaster the Centre for Economics and Business Research, said: “As a weaker pound contributes to higher import prices and in turn a sharp rise in inflation, consumers will feel the squeeze. A slight rise in unemployment and lower consumer confidence will also encourage households to cut back on spending.”
TUC general secretary Frances O’Grady said: “These figures show there’s no room for complacency. British manufacturing is still struggling.”
John Hawksworth, chief economist at consulting giant PwC, said: “Overall, it looks like the economic impact of Brexit is more likely to be a gradual drag on growth over the next few years as negotiations with the EU proceed, rather than a short, sharp shock.”
Meanwhile, a Government minister warned that prices would rise after the sharp decline in the value of sterling — and that the public had been warned of this risk before the June 23 vote.
“Consumers are going to start to see rising prices and there’s nothing we can do about that,” said international trade minister Mark Garnier. “That was a well-predicted effect of Brexit.”
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