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UK GDP: Economy grew by 0.5% after Brexit vote – business live | |
(35 minutes later) | |
10.01am BST | |
10:01 | |
Economists: Brexit impact will be felt in 2017 | |
Today’s GDP report is an important measure of the health of Britain’s economy after June’s historic referendum. | |
But several economists say the real test of the Brexit vote will come in 2017, not today. | |
Here’s PwC’s Andrew Sentance: | |
UK #GDP was resilient in Q3, led by services. But impact of #Brexit decision on investment still likely to dampen growth next year. | |
Geoffrey Yu, head of UK Investment Office at UBS Wealth Management, predicts that growth will keep slowing: | |
Anecdotal evidence supports the view that we’re yet to see any meaningful damage as a result of the Brexit vote, at least in the short-term. | |
“Of course, we should not overlook the lingering sense of uncertainty. Though the economy has fared better than initially feared, we expect that economic growth will slow down relative to the early part of this year. | |
Jeremy Cook, chief economist at the international payments company World First, says we’ll have a better picture once Theresa May has triggered article 50: | |
“We have called the UK consumer a hardy beast in the past and in Q3 the beast was back. The services sector singlehandedly drove growth to a 15th consecutive positive quarter and while the ‘little evidence of a pronounced effect’ from the Brexit vote is being seen yet, we think that it will be as gradually obvious as the year comes to an end. The beast will tire as inflation fires arrows at its increasingly weakening hide.” | |
Updated | |
at 10.01am BST | |
9.57am BST | |
09:57 | |
Thomas Laskey of Aberdeen Asset Management argues that the Bank of England should get some credit for today’s growth report: | |
“The data shows that the UK economy fared well in the aftermath of the EU referendum. It confirms what most investors thought: that sentiment bounced back after the initial shock of the result. Growth was fairly strong, at least in part because the Bank of England restarted its bond buying programme and the fact that changes to investment plans take time to play out. | |
But he predicts slower growth next year: | |
“The outlooks for growth is pretty uncertain. Brexit has the potential to be extremely costly to the UK and the country could be poorer as a result. We’ve already seen this reflected in sterling’s dramatic drop. Growth will probably slow as import costs increase and people’s incomes fall as inflation rises. We are not out of the woods yet by any means.” | |
Updated | |
at 9.58am BST | |
9.51am BST | |
09:51 | |
You can see the GDP report online, here: | |
Gross Domestic Product, preliminary estimate: July to Sept 2016 | |
9.50am BST | |
09:50 | |
Hammond hails GDP report | |
Chancellor Philip Hammond says today’s report shows that the UK economy is resilient, and ‘well-placed’ to deal with the challenges and opportunities created by the EU referendum. | |
We are moving into a period of negotiations with the EU and we are determined to get the very best deal for households and businesses. The economy will need to adjust to a new relationship with the EU, but we are well-placed to deal with the challenges and take advantage of opportunities ahead.” | |
Here's my response to today's @ONS GDP figures. pic.twitter.com/GGdt0UCFkr | |
Updated | |
at 9.53am BST | |
9.49am BST | |
09:49 | |
Anyone remember George Osborne’s plan to rebalance the economy and create a March of the Makers? | |
Five year’s later, Britain is as dependent on service sector growth as ever: | |
So much for rebalancing. UK Q3 GDP growth entirely driven by services sector. Everything else (manufacturing, construction etc) shrinking pic.twitter.com/Cnr1D2Rrj6 | |
9.43am BST | |
09:43 | |
Britain’s economy has now grown for 15 quarters in a row, and is 8.2% higher than the pre-economic downturn peak in early 2008. | |
9.40am BST | |
09:40 | |
ONS: Little evidence of Brexit effect | |
Today’s report shows that Britain has not suffered a Brexit shock, according to Joe Grice, head of the Office for National Statistics. | |
Grice says: | |
There is little evidence of a pronounced effect in the immediate aftermath of the vote” | |
9.39am BST | |
09:39 | |
The pound has rallied a little, to $1.225, as traders welcome the GDP report. | |
A small flurry of excitement for the pound GBPUSD on the GDP release but nothing excessive - back to this week's highs: pic.twitter.com/OrR2wc5zst | |
9.37am BST | |
09:37 | |
Service sector grows, everything else shrank | |
Britain’s service sector, which makes up three quarters of the economy, is the only part which grew in the last three months. | |
Service sector output grew by 0.8% in July-September. | |
9.34am BST | |
09:34 | |
At first glance, this report suggests that the UK economy has shrugged off the immediate shock of the EU referendum. | |
It has grown faster than predicted in the gloomier forecasts ahead of June’s vote. Remember, the Treasury said the economy would shrink by 0.1% after a Brexit vote. | |
Boom. UK GDP 0.5% q/q in Q3 - bang in line with the post-crisis average. @graemewearden pic.twitter.com/Ah3K78bHaQ | |
9.32am BST | |
09:32 | |
On an annual basis, the UK economy grew by 2.3% during the last quarter. | |
Again, that’s stronger than expected. | |
UK GDP Q3 (YoY)Actual: 2.3% Survey: 2.1% Prior: 2.1% #gbp | |
GDP 0.5%.. quite a bit better than many economists expected | |
9.30am BST | |
09:30 | |
UK GDP RELEASED | |
HERE WE GO! Britain’s economy grew by 0.5% in the three months after the Brexit vote. | |
That’s down from 0.7% in the second quarter of 2016, showing that growth has slowed. | |
But it’s also stronger than the 0.3% which economists has expected. | |
More to follow! | |
9.29am BST | 9.29am BST |
09:29 | 09:29 |
The pound has risen back to $1.224... | The pound has risen back to $1.224... |
I guess GDP is going to be decent then.. | I guess GDP is going to be decent then.. |
9.26am BST | 9.26am BST |
09:26 | 09:26 |
Tension is building, with just four minutes until we learn how the UK economy performed after the EU referendum.... | Tension is building, with just four minutes until we learn how the UK economy performed after the EU referendum.... |
Stand by your desks! UK GDP is due in a few minutes.... | Stand by your desks! UK GDP is due in a few minutes.... |
9.21am BST | 9.21am BST |
09:21 | 09:21 |
Back in April, the Treasury claimed that the economy would shrink by 0.1% for four quarters in a row, if Britain voted to leave the EU. | Back in April, the Treasury claimed that the economy would shrink by 0.1% for four quarters in a row, if Britain voted to leave the EU. |
Today’s GDP report is the first test of that assessment.... | Today’s GDP report is the first test of that assessment.... |
Q3 GDP forecast by OBR a year ago at +0.7%, at Budget at +0.5%. And in HMT pre EUref impact assessment at -0.1 ... pic.twitter.com/tV8OPlZDtt | Q3 GDP forecast by OBR a year ago at +0.7%, at Budget at +0.5%. And in HMT pre EUref impact assessment at -0.1 ... pic.twitter.com/tV8OPlZDtt |
9.07am BST | 9.07am BST |
09:07 | 09:07 |
A flash of good news from Madrid: the Spanish unemployment rate hit its lowest level since 2009 in the last quarter. But it’s still 18.9%, despite a surge in summer hiring to handle the tourist trade. | A flash of good news from Madrid: the Spanish unemployment rate hit its lowest level since 2009 in the last quarter. But it’s still 18.9%, despite a surge in summer hiring to handle the tourist trade. |