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UK economy grew at half the rate of the eurozone’s in second quarter of 2017 UK economy grew at half the rate of the eurozone’s in second quarter of 2017
(35 minutes later)
The UK’s economy grew at half the rate of the eurozone’s during the second quarter of the year, new figures reveal. The UK’s economy grew at half the rate of the eurozone’s during the second quarter of the year, as a Brexit-fuelled jump in inflation dealt a sharp blow to consumer spending.
A second reading of the figures from the Office for National Statistics showed on Thursday that the UK economy expanded by 0.3 per cent in the three months to the end of June, unrevised from a previous reading. A second reading of official figures from the Office for National Statistics showed on Thursday that the UK economy had expanded by 0.3 per cent in the three months to the end of June, unrevised from previous figures.
Earlier this month, an estimate for growth in the 19-member single currency bloc was 0.6 per cent. Earlier this month, an estimate for growth over the same period in the 19-member single currency bloc was 0.6 per cent.
The UK economy displayed surprising resilience in the immediate aftermath of last June’s Brexit vote, with an expansion of 0.5 per cent in the third quarter of the year and 0.7 per cent in the final quarter. The economy dsiplayed surprising resilience in the immediate aftermath of last June’s Brexit vote, with an expansion of 0.5 per cent in the third quarter of the year and 0.7 per cent in the final quarter. But more recently a jump in inflation, stemming from a dramatic sell-off in the pound against the euro, the US dollar and other currencies, has dampened consumer spending and pushed the UK’s growth rate to the lowest of the G7 club of large and developed economies.
But more recently a jump in inflation, stemming from a dramatic sell-off in the pound against the euro, the US dollar and other currencies, has dampened consumer spending this year, and pushed the UK’s growth rate to the lowest of the G7 club of large and developed economies. Strategists, analysts and think tanks have in recent weeks slashed their growth forecasts for the full year and many anticipate that the pound could fall further still.
More follows… “Looking ahead, we expect the economy to continue to struggle,” Samuel Tombs, chief UK economist at Pantheon Macroeconomics said on Thursday. He said he expects the economy to grow by just 0.2 per cent in the third and fourth quarters of 2017.
  “The sharp fall in consumers’ confidence over the last two months suggest that households won’t continue to cut their saving rate,” he added. “We expect Brexit risk to increasingly bear down on business investment as the UK’s exit date draws nearer."
In July, the International Monetary Fund (IMF) said that it expects the country’s economy to grow by 1.7 per cent overall in 2017, compared to a previous forecast of 2 per cent.
The Centre for Economics and Business Research (Cebr) anticipates that the UK economy will grow by just 1.3 per cent in 2017, representing a substantial downward revision from an earlier forecast of 1.7 per cent.
Retail sales, a key barometer of the strength of the UK consumer, were up 0.3 per cent in July but the annual rate of growth dropped sharply to 1.3 per cent from 2.8 per cent previously.
Official inflation was 2.6 per cent in July, up from just 0.6 per cent a year earlier.