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You can find the current article at its original source at https://www.theguardian.com/business/live/2016/jul/27/uk-gdp-economy-growth-brexit-referendum-pound-markets-live
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| Chancellor Hammond claims UK economic fundamentals are strong as growth rises – live updates | |
| (35 minutes later) | |
| 11.13am BST | |
| 11:13 | |
| Andrew Sentance, senior economic adviser at PwC, fears that Britain’s economy is entering a period of weak growth, despite the forecast-beating performance in the last quarter: | |
| “The pick up in growth in the UK in the second quarter is consistent with other data - for employment, retail sales and yesterday’s CBI survey of manufacturers. | |
| “However, we also know that the EU Referendum result has sent a shockwave through the business world and we should expect much slower growth this quarter - the main scenario in our latest PwC Economic Outlook suggests growth slowing to around 1.6% this year. 2017 is likely to see even more sluggish growth - our central view is for GDP to increase by just 0.6% next year. | |
| 11.03am BST | |
| 11:03 | |
| Once upon a time, Britain’s chancellor would have celebrated today’s growth figures by donning a florescent jacket and building a wall. | |
| But Philip Hammond doesn’t shares George Osborne’s love of hard hats; so he’s decamped to London City Airport this morning. | |
| He’s there to announce a £344m expansion programme for the airport, meaning more space for planes and an enlarged terminal to house extra passengers. | |
| 10.39am BST | 10.39am BST |
| 10:39 | 10:39 |
| Today’s report shows that “dire predictions” that the economy would grind to a halt before the EU referendum were false, says Peter Rosenstreich of Swissquote Bank. | Today’s report shows that “dire predictions” that the economy would grind to a halt before the EU referendum were false, says Peter Rosenstreich of Swissquote Bank. |
| In actuality, growth accelerated as business raced ahead of the uncertain vote (lead by industrial output). This unexpected read indicates that the UK economy was in stronger position ahead of the vote then originally forecasted. | In actuality, growth accelerated as business raced ahead of the uncertain vote (lead by industrial output). This unexpected read indicates that the UK economy was in stronger position ahead of the vote then originally forecasted. |
| But Rosenstreich also fears Britain could now fall into recession: | But Rosenstreich also fears Britain could now fall into recession: |
| However, this preliminary estimate does not capture the post referendum fallout, which is likely to drive Q3 lower, possibly into recession. We remain bearish on the British pound as the UK economy will clearly go through a period of economic adjustment and likely BoE interest rate cuts.” | However, this preliminary estimate does not capture the post referendum fallout, which is likely to drive Q3 lower, possibly into recession. We remain bearish on the British pound as the UK economy will clearly go through a period of economic adjustment and likely BoE interest rate cuts.” |
| Updated | Updated |
| at 10.39am BST | at 10.39am BST |
| 10.38am BST | 10.38am BST |
| 10:38 | 10:38 |
| One decent quarter doesn’t mean Britain’s industrial sector has roared back, points out Ben Chu of the Independent: | One decent quarter doesn’t mean Britain’s industrial sector has roared back, points out Ben Chu of the Independent: |
| Here's that Q2 surge in manufacturing and industrial production in a post 2008 levels context: pic.twitter.com/zHVCZECEge | Here's that Q2 surge in manufacturing and industrial production in a post 2008 levels context: pic.twitter.com/zHVCZECEge |
| 10.26am BST | 10.26am BST |
| 10:26 | 10:26 |
| The chancellor has been tweeting: | The chancellor has been tweeting: |
| #GDP growth of 0.6% in Q2 2016 shows UK economic fundamentals are strong with biggest quarterly rise in production for nearly 20 years | #GDP growth of 0.6% in Q2 2016 shows UK economic fundamentals are strong with biggest quarterly rise in production for nearly 20 years |
| Britain is open for business – as we enter a period of adjustment, I’m confident we have the tools to manage the challenges ahead #GDP | Britain is open for business – as we enter a period of adjustment, I’m confident we have the tools to manage the challenges ahead #GDP |
| 10.25am BST | 10.25am BST |
| 10:25 | 10:25 |
| Martin Beck, senior economic advisor to the EY ITEM Club, also fears that the UK will contract following the Brexit vote, but might avoid a full-blown recession. | Martin Beck, senior economic advisor to the EY ITEM Club, also fears that the UK will contract following the Brexit vote, but might avoid a full-blown recession. |
| He points out that today’s strong growth reading is “almost entirely due to the exceptional April performance” [see earlier graph] That means the economy was probably weakening in June. | He points out that today’s strong growth reading is “almost entirely due to the exceptional April performance” [see earlier graph] That means the economy was probably weakening in June. |
| “GDP growth in Q2 looks likely to represent one last hurrah for the economy before it enters a softer and more turbulent period. The lack of momentum as the economy entered Q3 means that the chances of a negative reading for the current quarter are relatively high. | “GDP growth in Q2 looks likely to represent one last hurrah for the economy before it enters a softer and more turbulent period. The lack of momentum as the economy entered Q3 means that the chances of a negative reading for the current quarter are relatively high. |
| However, our view remains that the extent to which the economy will slow in the second half of the year has been overplayed and that the UK may avoid a technical recession.” | However, our view remains that the extent to which the economy will slow in the second half of the year has been overplayed and that the UK may avoid a technical recession.” |
| 10.15am BST | 10.15am BST |
| 10:15 | 10:15 |
| Ben Brettell, senior economist at financial services firm Hargreaves Lansdown, is encouraged by the 2.1% surge in UK industrial output: | Ben Brettell, senior economist at financial services firm Hargreaves Lansdown, is encouraged by the 2.1% surge in UK industrial output: |
| The UK economy shook off pre-referendum nerves to grow by a better-than-expected 0.6% in the second quarter, with a notably strong performance from the manufacturing sector. | The UK economy shook off pre-referendum nerves to grow by a better-than-expected 0.6% in the second quarter, with a notably strong performance from the manufacturing sector. |
| It’s always difficult to tell where you’re going by looking in the rear-view mirror, and as such today’s GDP figures can’t be taken as evidence of the current climate. However, what they do show is an absence of pre-Brexit concerns, meaning that if the forecast downturn does materialise, at least we start from a position of relative strength. | It’s always difficult to tell where you’re going by looking in the rear-view mirror, and as such today’s GDP figures can’t be taken as evidence of the current climate. However, what they do show is an absence of pre-Brexit concerns, meaning that if the forecast downturn does materialise, at least we start from a position of relative strength. |
| However... Danielle Haralambous of the Economist Intelligence Unit reckons it won’t last..... | However... Danielle Haralambous of the Economist Intelligence Unit reckons it won’t last..... |
| Upturn in manufacturing production helped drive 0.6% #UK GDP growth in Q2. Surveys suggest won't be repeated in Q3. pic.twitter.com/ApTpRkU1VO | Upturn in manufacturing production helped drive 0.6% #UK GDP growth in Q2. Surveys suggest won't be repeated in Q3. pic.twitter.com/ApTpRkU1VO |
| 10.05am BST | 10.05am BST |
| 10:05 | 10:05 |
| Economist: UK likely to shrink this quarter | Economist: UK likely to shrink this quarter |
| Jeremy Cook, chief economist at the international payments company, World First, fears that Britain’s economy will shrink in the current quarter, despite a better performance than expected in the last three months. | Jeremy Cook, chief economist at the international payments company, World First, fears that Britain’s economy will shrink in the current quarter, despite a better performance than expected in the last three months. |
| He says: | He says: |
| Preliminary GDP figures are always heavily caveated; less than 50% of the survey data is in and will likely over-represent the beginning of the quarter compared to the end..... | Preliminary GDP figures are always heavily caveated; less than 50% of the survey data is in and will likely over-represent the beginning of the quarter compared to the end..... |
| “Unfortunately we believe the overall UK economic picture is one of recession at the moment and while it is still too early to forecast we are looking for Q3 GDP to fall by anywhere 0.1-0.4%. Today’s data will limit calls that the UK was slowing into the vote however.” | “Unfortunately we believe the overall UK economic picture is one of recession at the moment and while it is still too early to forecast we are looking for Q3 GDP to fall by anywhere 0.1-0.4%. Today’s data will limit calls that the UK was slowing into the vote however.” |
| Updated | Updated |
| at 10.21am BST | at 10.21am BST |
| 10.01am BST | 10.01am BST |
| 10:01 | 10:01 |
| A word of caution.... | A word of caution.... |
| Today’s GDP report is mainly based on data from April and May, as it’s too early to have a full picture of the economy in June. | Today’s GDP report is mainly based on data from April and May, as it’s too early to have a full picture of the economy in June. |
| So if Britain did suffer a dose of Brexit angst last month, it won’t appear in today’s data - we’ll have to wait for the second estimate of GDP in August. | So if Britain did suffer a dose of Brexit angst last month, it won’t appear in today’s data - we’ll have to wait for the second estimate of GDP in August. |
| Simon French, chief economist of Panmure Gordon, flags up that April was a particularly strong month: | Simon French, chief economist of Panmure Gordon, flags up that April was a particularly strong month: |
| 0.6% QoQ growth in Q2 UK GDP. April data across all sectors looks distorted due to March Easter holidays pic.twitter.com/1my3VoqSJz | 0.6% QoQ growth in Q2 UK GDP. April data across all sectors looks distorted due to March Easter holidays pic.twitter.com/1my3VoqSJz |
| 9.56am BST | 9.56am BST |
| 09:56 | 09:56 |
| ONS: Little sign of Brexit fears | ONS: Little sign of Brexit fears |
| Britain’s carmakers and pharmaceutical firms helped to drive the economy forwards, according to Joe Grice, the Office for National Statistics’ top economist. | Britain’s carmakers and pharmaceutical firms helped to drive the economy forwards, according to Joe Grice, the Office for National Statistics’ top economist. |
| The ONS also found little sign that the EU referendum on June 23rd had hurt the economy during the last quarter. | The ONS also found little sign that the EU referendum on June 23rd had hurt the economy during the last quarter. |
| Commenting on today’s Q2 GDP figures, ONS Chief Economist Joe Grice said: pic.twitter.com/74zR4EtvPR | Commenting on today’s Q2 GDP figures, ONS Chief Economist Joe Grice said: pic.twitter.com/74zR4EtvPR |
| 9.51am BST | 9.51am BST |
| 09:51 | 09:51 |
| Despite the surge in industrial output last quarter, the sector is *still* smaller than before the financial crisis back in 2008. | Despite the surge in industrial output last quarter, the sector is *still* smaller than before the financial crisis back in 2008. |
| Only the services sector (which makes up 70% of the economy) is larger: | Only the services sector (which makes up 70% of the economy) is larger: |
| Updated | Updated |
| at 9.54am BST | at 9.54am BST |
| 9.43am BST | 9.43am BST |
| 09:43 | 09:43 |
| Britain’s economy is now 7.7% higher than the pre-economic downturn peak, in the first quarter of 2008. | Britain’s economy is now 7.7% higher than the pre-economic downturn peak, in the first quarter of 2008. |
| The 0.6% growth recorded in Q2 means the UK has been growing for the last 14 quarters: | The 0.6% growth recorded in Q2 means the UK has been growing for the last 14 quarters: |
| 9.39am BST | 9.39am BST |
| 09:39 | 09:39 |
| Britain’s new Chancellor of the Exchequer, Philip Hammond, has welcomed the news that the UK growth rate has jumped to 0.6%. | Britain’s new Chancellor of the Exchequer, Philip Hammond, has welcomed the news that the UK growth rate has jumped to 0.6%. |
| He says: | He says: |
| “Today’s GDP figures show that the fundamentals of the British economy are strong. In the second quarter of this year our economy grew by 0.6 per cent – faster than was expected. Indeed we saw the strongest quarterly rise in production for nearly twenty years, so it is clear we enter our negotiations to leave the EU from a position of economic strength. | “Today’s GDP figures show that the fundamentals of the British economy are strong. In the second quarter of this year our economy grew by 0.6 per cent – faster than was expected. Indeed we saw the strongest quarterly rise in production for nearly twenty years, so it is clear we enter our negotiations to leave the EU from a position of economic strength. |
| “Those negotiations will signal the beginning of a period of adjustment, but I am confident we have the tools to manage the challenges ahead, and along with the Bank of England, this government will take whatever action is necessary to support our economy and maintain business and consumer confidence. | “Those negotiations will signal the beginning of a period of adjustment, but I am confident we have the tools to manage the challenges ahead, and along with the Bank of England, this government will take whatever action is necessary to support our economy and maintain business and consumer confidence. |
| 9.37am BST | 9.37am BST |
| 09:37 | 09:37 |
| UK industrial output leaps, but services slow | UK industrial output leaps, but services slow |
| Britain’s manufacturing sector has a very good quarter, according to today’s GDP report. | Britain’s manufacturing sector has a very good quarter, according to today’s GDP report. |
| UK industrial output jumped by 2.1% during the April-June period, the strongest quarterly growth since the third quarter of 1999. | UK industrial output jumped by 2.1% during the April-June period, the strongest quarterly growth since the third quarter of 1999. |
| UK GDP +0.6% in Q2 vs expected +0.4%, driven by strongest industrial production growth since 1999. Annual GDP +2.2% vs expected 2.0%. | UK GDP +0.6% in Q2 vs expected +0.4%, driven by strongest industrial production growth since 1999. Annual GDP +2.2% vs expected 2.0%. |
| However, the service sector slowed to 0.5% growth, down from 0.6% in Q1. | However, the service sector slowed to 0.5% growth, down from 0.6% in Q1. |
| And construction output shrank by 0.4%. | And construction output shrank by 0.4%. |