British economy grows 0.3% in second quarter

The British economy is getting used to life in the slow growth lane

London (AFP) – Britain’s economy expanded 0.3 percent in the second quarter, unrevised official data showed Friday, as analysts said it was mired in the “slow growth lane” after last year’s Brexit vote.

Gross domestic product growth for the first quarter, or April-June period, was however upgraded to 0.3 percent from 0.2 percent previously, the Office for National Statistics added in a statement. 

The second-quarter reading was in line with market expectations for no change in the growth rate.

Howard Archer, chief economic advisor at the EY ITEM Club research group, noted that the “UK remained stuck in slow growth lane in second quarter”.

He also forecast that the economy would see uninspiring growth for the foreseeable future, as consumer spending is pegged back by high inflation.

“We suspect that the economy will continue to see lacklustre growth over the fourth quarter of 2017 and the early months of 2018.

“The squeeze on consumers will remain appreciable in the near-term and could very well deepen in the fourth quarter as consumer price inflation likely to briefly rise above 3.0 percent and earnings growth remains muted.”

British inflation has risen sharply in recent months as a Brexit-hit pound raises import costs.

The Consumer Prices Index (CPI) 12-month rate jumped to 2.9 percent in August compared to 2.6 percent in July, recent data showed.

The Bank of England’s chief task is to use monetary policy as a tool to keep the annual inflation rate close to a 2.0-percent target level.



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