The latest official UK GDP figures showed 0.4% growth in the first quarter of 2016 in line with forecasts, and down from 0.6% the previous quarter. The slowdown in the UK economy for the first three months of 2016 period is in line with expert expectations, and means the year-on-year rate of progress remain at 2.1%.
June’s EU referendum could have an impact on UK’s underwhelming growth pace. “Two weeks ago the Bank of England said that concerns about the EU referendum had begun to affect the real economy, and many commentators will view today’s GDP figures as evidence to support this hypothesis,” commented Ben Brettell, senior economist at Hargreaves Lansdown.
“Weaker construction and production output are the primary reasons for the slowdown, which could prompt concerns that the UK economy’s reliance on the services sector is increasing further. Production output declined 0.4% and construction was down by 0.9%, whereas the dominant services sector grew by 0.6%,” said Brettell.
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[Source: International Adviser – Karin Wasteson – April 27, 2016]