As predicted by some UK economists, the UK economy grew 0.3% in the second quarter of 2017, according to figures released today from the Office for National Statistics, ONS.
The report showed modest growth from March to June compared to the first quarter of 2017 where growth was recorded at 0.2%, a sharp fall against the previous quarter when growth of 0.7% was achieved which made the UK the worst performing economy in the EU at the start of the year.
The latest figures add to speculation that the Bank of England will maintain the current record low for interest rates.
The ONS said the growth was largely due to services, particularly in the retail and leisure sectors where retailers, hotels and restaurants enjoyed a healthy quarter. The UK film industry also had a stronger quarter as box offices and the film industry reported a more buoyant trading period.
However collectively, it is the weakest half year for the UK economy in half a decade. Manufacturing output fell by 0.5pc despite hopes that the weaker pound would boost exports. Construction output also plunged by 0.9pc.
Earlier this week the International Monetary Fund – IMF – downgraded its forecast for the UK economy, calling its performance “tepid” and now expects UK GDP to grow by 1.7% instead of its previous projection of 2%.
As reported in the Independent, professional services firm PwC last week trimmed its forecast for economic expansion, anticipating growth of just 1.5 per cent in 2017 and 1.4 per cent in 2018 from 1.8 per cent growth last year. And the Centre for Economics and Business Research (Cebr) anticipates that the UK economy will grow by just 1.3 per cent in 2017, a substantial downward revision from an earlier forecast of 1.7 per cent.
Many analysts still believe Brexit will set back the economy over the long run. The scale of damage, most say, will depend on the nature of future trade arrangements with the EU, which is the UK’s biggest trade partner.