The UK economy grew by a “modest” 0.3% between the first and second quarter, according to the latest data from the Office for National Statistics.
The ONS maintained its preliminary estimate for UK GDP over the second quarter, putting the economy’s acceleration at 0.3%.
However, there was a notable slowdown in growth in terms of household spending, which increased by just 0.1% in the three months to June.
In particular, there was a slowdown in spending for new cars during the period, as the effects of higher inflation and weak sterling caused consumers to hold off on big purchases.
“Whilst it is clear that the Brexit-fuelled catastrophe predicted by some has not yet come to pass, there are signs that UK consumers are being squeezed,” said Brown Shipley investment analyst Jonathan Chitty.
Although the ONS reported “relatively strong growth” in government spending, business investment was flat quarter-on-quarter, which commentators attributed to ongoing uncertainties around Brexit.
John Hawksworth, chief economist at PwC, called the growth over the second quarter “modest,” noting it was only around half the growth rates seen in the US and the eurozone over the same timeframe.
“Overall, this data confirms the picture of a moderation in UK growth that we expect to continue through the second half of the year,” he said.
However, Hawksworth said he doesn’t think this slowdown will turn into a recession, given that “employment growth remains reasonably strong and government spending is now cushioning some of the blow to business confidence from Brexit”.
Chitty said the figures reiterated the uncertain picture for the UK economy.
“When compared to 2016 there has been something of a slowdown in the first half of 2017, and with institutions like the Bank of England and the International Monetary Fund sounding decidedly cautious on the UK’s prospects, a great deal of uncertainty lies ahead for the world’s fifth biggest economy,” he said.
