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Household spending growth 'slowest since end of 2014' | Household spending growth 'slowest since end of 2014' |
(about 1 hour later) | |
Household spending saw its lowest rise in two-and-a-half years, partly due to a slowdown in car sales, according to official data. | Household spending saw its lowest rise in two-and-a-half years, partly due to a slowdown in car sales, according to official data. |
In the three months to June, spending grew by 0.1%, the slowest since the end of 2014, the Office for National Statistics (ONS) said. | In the three months to June, spending grew by 0.1%, the slowest since the end of 2014, the Office for National Statistics (ONS) said. |
It came as the ONS confirmed economic growth was 0.3% in the second quarter. | It came as the ONS confirmed economic growth was 0.3% in the second quarter. |
Analysts said the figures highlighted the UK as the slowest growing economy in the G7 so far this year. | Analysts said the figures highlighted the UK as the slowest growing economy in the G7 so far this year. |
The ONS said the slowdown in spending reflected "a deterioration of the economic position of consumers in the start of 2017". | The ONS said the slowdown in spending reflected "a deterioration of the economic position of consumers in the start of 2017". |
A major factor in the fall was lower spending on transport - including cars - which declined 2.2%, according to the ONS. | |
That was partly due to customers buying more cars at the start of the year before road tax changes came into effect in April. | That was partly due to customers buying more cars at the start of the year before road tax changes came into effect in April. |
In a further sign of the squeeze on consumers, a survey suggested British retail sales growth had slowed in August at the fastest pace in more than a year. | |
The CBI's monthly retail sales balance slid to -10 in August from +22 last month, its lowest since July 2016 - shortly after the Brexit vote. | |
"Despite the warmer weather at the start of the month, retail sales have cooled as higher inflation continues to squeeze consumers' pockets," CBI economist Anna Leach said. | |
Consumer spending is a major driver of the UK economy, but has been put under pressure by inflation outpacing people's wages. | |
'Moderation' | 'Moderation' |
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said the GDP figures confirmed the UK economy grew by 0.5% in the first half of the year. | Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said the GDP figures confirmed the UK economy grew by 0.5% in the first half of the year. |
That was slower than Japan, Germany, France, US, Canada and Italy, he said. | That was slower than Japan, Germany, France, US, Canada and Italy, he said. |
John Hawksworth, chief economist at PwC, said the UK economy had grown at "only around half the growth rates seen in the US and the eurozone in that quarter". | John Hawksworth, chief economist at PwC, said the UK economy had grown at "only around half the growth rates seen in the US and the eurozone in that quarter". |
"This data confirms the picture of a moderation in UK growth that we expect to continue through the second half of the year," he added. | "This data confirms the picture of a moderation in UK growth that we expect to continue through the second half of the year," he added. |
Investment rose by 0.7%, but this came from higher government spending rather than from businesses. | Investment rose by 0.7%, but this came from higher government spending rather than from businesses. |
Exports of British-made goods increased by 1.5% but exports of services fell by 0.4% and imports also rose. | Exports of British-made goods increased by 1.5% but exports of services fell by 0.4% and imports also rose. |