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You can find the current article at its original source at https://www.theguardian.com/business/2016/jul/27/uk-growth-will-slow-down-markedly-despite-upbeat-gdp-figures
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| UK growth will slow down markedly, despite upbeat GDP figures | UK growth will slow down markedly, despite upbeat GDP figures |
| (35 minutes later) | |
| The comment from Philip Hammond spoke volumes. Yes, the chancellor was pleased that UK growth in the quarter leading up to the Brexit referendum had been stronger at 0.6% than anybody had been expecting. | The comment from Philip Hammond spoke volumes. Yes, the chancellor was pleased that UK growth in the quarter leading up to the Brexit referendum had been stronger at 0.6% than anybody had been expecting. |
| But the new boss at the Treasury knows full well that this was likely to be the best set of GDP data for some time. When Hammond talked about a “period of adjustment”, what he meant was that the economy is going to cool – perhaps abruptly – following the decision to leave the EU. | But the new boss at the Treasury knows full well that this was likely to be the best set of GDP data for some time. When Hammond talked about a “period of adjustment”, what he meant was that the economy is going to cool – perhaps abruptly – following the decision to leave the EU. |
| What’s certain is that the strength of the economy going into Brexit – while welcome for Theresa May’s government – will have zero impact on decisions taken by the Bank of England and the Treasury over the coming months. Policymakers will treat the second quarter growth numbers as a historical curiosity, which is really what they are. | What’s certain is that the strength of the economy going into Brexit – while welcome for Theresa May’s government – will have zero impact on decisions taken by the Bank of England and the Treasury over the coming months. Policymakers will treat the second quarter growth numbers as a historical curiosity, which is really what they are. |
| Certain aspects of the Office for National Statistics release provide hope that the economic fallout from Brexit might be less pronounced than feared. Industry put on its best performance in almost two decades during the second quarter and now has the added advantage of a cheaper pound to make exports more competitive. | |
| Related: UK economy grew by 0.6% before Brexit vote | |
| Joe Grice, chief economist at the ONS, said there was no real evidence of Brexit uncertainty affecting businesses in the second quarter. | Joe Grice, chief economist at the ONS, said there was no real evidence of Brexit uncertainty affecting businesses in the second quarter. |
| On the other hand, there are clearly reasons to be cautious. Growth was concentrated in the first month of the quarter, April, before it fell back in May. The ONS relies on forecasts to assess what was happening in June and believes the economy was flat. That suggests there was little momentum when the referendum was held. | On the other hand, there are clearly reasons to be cautious. Growth was concentrated in the first month of the quarter, April, before it fell back in May. The ONS relies on forecasts to assess what was happening in June and believes the economy was flat. That suggests there was little momentum when the referendum was held. |
| The Brexit result was unexpected and has, judging by the surveys since, affected the outlook for both the services and manufacturing sectors. Construction was the one sector that was already struggling in the buildup to the vote and is likely to face an even tougher winter than the rest of the economy. | The Brexit result was unexpected and has, judging by the surveys since, affected the outlook for both the services and manufacturing sectors. Construction was the one sector that was already struggling in the buildup to the vote and is likely to face an even tougher winter than the rest of the economy. |
| Growth is going to slow down markedly from now on. The length and depth of that slowdown will depend on how quickly businesses regain their equilibrium. The Bank of England knows that, which is why a big package of measures designed to boost confidence will be announced next week. | Growth is going to slow down markedly from now on. The length and depth of that slowdown will depend on how quickly businesses regain their equilibrium. The Bank of England knows that, which is why a big package of measures designed to boost confidence will be announced next week. |