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You can find the current article at its original source at https://www.theguardian.com/business/live/2017/oct/25/uk-gdp-britain-growth-slowdown-brexit-pound-ftse-business-live
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| UK GDP: Britain's economy grew by 0.4% as Brexit slowdown continues - business live | UK GDP: Britain's economy grew by 0.4% as Brexit slowdown continues - business live |
| (35 minutes later) | |
| 1.17pm BST | |
| 13:17 | |
| Difficult times call for radical measures...and Labour MP Liam Byrne argues that Britain needs to rethink its economic model to get growth motoring again. | |
| Writing in the Guardian, Byrne says: | |
| London is an incredible 40% more productive than Wales. And in contrast to the shibboleths of traditional growth theory, our regions are failing to converge over very long periods of time. A bold new model would grant new fiscal freedoms to regions to borrow to invest in infrastructure and housing – as first proposed by the Keynes-inspired 1944 white paper on full employment. Devolution of the apprenticeship levy would rescue a failing policy and allow regions to coordinate technical education. And a radical boost to the Higher Education Innovation Fund would transform the power of regional universities to provide research and development to Britain’s underproductive small business base. | |
| However elegant the strategy, said Winston Churchill, it’s good to occasionally look at the results. Today’s economic results are disappointing. It’s time to change the theory and practise of the strategy. | |
| 6/. Our economic model needs to change. Here's how: https://t.co/UnZQIXeEZ7 | |
| Updated | |
| at 1.18pm BST | |
| 1.01pm BST | 1.01pm BST |
| 13:01 | 13:01 |
| Duncan Weldon, head of research at the Resolution Group, says the big picture is that Britain’s economy has slowed over the last decade. | Duncan Weldon, head of research at the Resolution Group, says the big picture is that Britain’s economy has slowed over the last decade. |
| That’s partly due to Britain’s weak productivity - a problem that no-one seems close to solving. | That’s partly due to Britain’s weak productivity - a problem that no-one seems close to solving. |
| But Brexit doesn’t help, he writes: | But Brexit doesn’t help, he writes: |
| Increased uncertainty over the UK’s future trading relationships, regulations and migration policy have led many firms to put investment on hold. The British economy has no doubt performed better than many analysts (including this one) expected since the referendum, but that performance still can’t be termed “strong”. It is important to remember that the UK’s better-than-expected performance – relative to the most pessimistic pre-Brexit vote views – has come at a time when the global economy as a whole has been putting in a stronger performance. | Increased uncertainty over the UK’s future trading relationships, regulations and migration policy have led many firms to put investment on hold. The British economy has no doubt performed better than many analysts (including this one) expected since the referendum, but that performance still can’t be termed “strong”. It is important to remember that the UK’s better-than-expected performance – relative to the most pessimistic pre-Brexit vote views – has come at a time when the global economy as a whole has been putting in a stronger performance. |
| This month the International Monetary Fund estimated that the global economy would grow 3.6% in 2018 and that advanced economies would expand by 2.2%. Those numbers compare to estimates of 3.2% and 2.0% before June’s referendum. Meanwhile they now pencil in growth of just 1.7% for the UK next year as opposed to an estimate of 2.2% 18 months ago. In other words, while the prospects for the world economy and other developed countries have improved, our own outlook has darkened. | This month the International Monetary Fund estimated that the global economy would grow 3.6% in 2018 and that advanced economies would expand by 2.2%. Those numbers compare to estimates of 3.2% and 2.0% before June’s referendum. Meanwhile they now pencil in growth of just 1.7% for the UK next year as opposed to an estimate of 2.2% 18 months ago. In other words, while the prospects for the world economy and other developed countries have improved, our own outlook has darkened. |
| More here: | More here: |
| 12.49pm BST | 12.49pm BST |
| 12:49 | 12:49 |
| Our economics editor, Larry Elliott, reckons that the (small) pick-up in UK growth over the summer will persuade the Bank of England to raise interest rates next week. | Our economics editor, Larry Elliott, reckons that the (small) pick-up in UK growth over the summer will persuade the Bank of England to raise interest rates next week. |
| 12.22pm BST | 12.22pm BST |
| 12:22 | 12:22 |
| UK government bond prices have fallen since the GPD figures came out. | UK government bond prices have fallen since the GPD figures came out. |
| This has pushed the interest rate (or yield) on 10-year UK debt to 1.41% - on track for its highest level since January. | This has pushed the interest rate (or yield) on 10-year UK debt to 1.41% - on track for its highest level since January. |
| This is another sign that the City expects UK interest rates to rise soon (so investors are selling UK bonds and buying higher-yielding assets). | This is another sign that the City expects UK interest rates to rise soon (so investors are selling UK bonds and buying higher-yielding assets). |
| #YIELD CHART! UK 10-year bond yield rises to the highest level since early this year as #GDP growth beats estimates, rate hike more likely. pic.twitter.com/frkYwvnbPK | #YIELD CHART! UK 10-year bond yield rises to the highest level since early this year as #GDP growth beats estimates, rate hike more likely. pic.twitter.com/frkYwvnbPK |
| 12.01pm BST | 12.01pm BST |
| 12:01 | 12:01 |
| Chancellor Philip Hammond has told reporters in London that Britain’s economy continued to outperform expectations. | Chancellor Philip Hammond has told reporters in London that Britain’s economy continued to outperform expectations. |
| Reuters has the details: | Reuters has the details: |
| “It’s a solid performance by the UK economy in the third quarter and it’s outperformed market expectations as the UK economy has done overall since the referendum last year. What it shows is the underlying fundamental strength of this economy,” Hammond said in televised comments to British broadcasters. | “It’s a solid performance by the UK economy in the third quarter and it’s outperformed market expectations as the UK economy has done overall since the referendum last year. What it shows is the underlying fundamental strength of this economy,” Hammond said in televised comments to British broadcasters. |
| Hammond has also been admiring Britain’s life sciences industry, at the Francis Crick Institute: | Hammond has also been admiring Britain’s life sciences industry, at the Francis Crick Institute: |
| I’m at @TheCrick this morning to announce an extra £17 million for our life sciences industry: https://t.co/X4rO7FruEq pic.twitter.com/K1F0HlGDqr | I’m at @TheCrick this morning to announce an extra £17 million for our life sciences industry: https://t.co/X4rO7FruEq pic.twitter.com/K1F0HlGDqr |
| 11.33am BST | 11.33am BST |
| 11:33 | 11:33 |
| Leslie: Slow growth shows importance of Brexit deal | Leslie: Slow growth shows importance of Brexit deal |
| Labour MP Chris Leslie, who supports the Open Britain campaign, says inflation and Brexit uncertainty are holding growth back: | Labour MP Chris Leslie, who supports the Open Britain campaign, says inflation and Brexit uncertainty are holding growth back: |
| “These figures show the damaging impact Brexit is already having on the economy, with workers and consumers feeling the squeeze in lower wages and higher prices. | “These figures show the damaging impact Brexit is already having on the economy, with workers and consumers feeling the squeeze in lower wages and higher prices. |
| Leslie adds that the UK needs to negotiate membership of the Single Market and Customs Union, rather than risk crashing out of Europe without a deal.... | Leslie adds that the UK needs to negotiate membership of the Single Market and Customs Union, rather than risk crashing out of Europe without a deal.... |
| Incidentally, the latest word from parliament is that MPs might not get a vote on Brexit until after the UK has left the European Union! A funny way of taking back control.... | Incidentally, the latest word from parliament is that MPs might not get a vote on Brexit until after the UK has left the European Union! A funny way of taking back control.... |
| David Davis says parliament may not get vote on final deal until after Brexit happens - https://t.co/b5FW0CmqFj | David Davis says parliament may not get vote on final deal until after Brexit happens - https://t.co/b5FW0CmqFj |
| Updated | Updated |
| at 11.34am BST | at 11.34am BST |
| 11.19am BST | 11.19am BST |
| 11:19 | 11:19 |
| The pound continues to push higher, now up 0.8 of a cent at $1.322, as the City continues to price in a rate hike next month. | The pound continues to push higher, now up 0.8 of a cent at $1.322, as the City continues to price in a rate hike next month. |
| Big move for the pound off the back of the GDP growth. 1.3230 still the obstacle: pic.twitter.com/Bu3iMfvRh2 | Big move for the pound off the back of the GDP growth. 1.3230 still the obstacle: pic.twitter.com/Bu3iMfvRh2 |
| But...Dr Gordon Fletcher of University of Salford Business School fears that a UK interest rate rise could undermine the recovery. | But...Dr Gordon Fletcher of University of Salford Business School fears that a UK interest rate rise could undermine the recovery. |
| He writes: | He writes: |
| Growth is now weaker compared to the other major European economies and could itself be seen as tangible result of a ‘Brexit effect’. The past decade has also been a time of historical low interest rates and now concern will turn towards the prospect of an imminent rise in this rate. | Growth is now weaker compared to the other major European economies and could itself be seen as tangible result of a ‘Brexit effect’. The past decade has also been a time of historical low interest rates and now concern will turn towards the prospect of an imminent rise in this rate. |
| A rate rise could then be a disincentive in a relatively weak economy to further business growth and expansion. It is a fine balance. | A rate rise could then be a disincentive in a relatively weak economy to further business growth and expansion. It is a fine balance. |
| 11.14am BST | 11.14am BST |
| 11:14 | 11:14 |
| Robert Gordon, CEO of Hitachi Capital UK, is pleased to see that manufacturing output rose by 1% during the quarter. | Robert Gordon, CEO of Hitachi Capital UK, is pleased to see that manufacturing output rose by 1% during the quarter. |
| As the backbone of our economy, the onus is now on the government to ensure that investment continues despite Brexit uncertainty.” | As the backbone of our economy, the onus is now on the government to ensure that investment continues despite Brexit uncertainty.” |
| 11.07am BST | 11.07am BST |
| 11:07 | 11:07 |
| Yael Selfin, chief economist at KPMG, says the UK economy has ‘lost its sparkle’, and put in another ‘lacklustre performance’ in the last quarter: | Yael Selfin, chief economist at KPMG, says the UK economy has ‘lost its sparkle’, and put in another ‘lacklustre performance’ in the last quarter: |
| She fears that growth will remain subdued while Brexit plays out... | She fears that growth will remain subdued while Brexit plays out... |
| There has been a deterioration in economic performance since the start of the year, as inflation has begun to bite and consumers have started to reconsider their priorities. | There has been a deterioration in economic performance since the start of the year, as inflation has begun to bite and consumers have started to reconsider their priorities. |
| This trend is likely to remain for a while, with Brexit related uncertainties looming large for consumers and businesses. Our expectations are therefore for annual GDP growth to fall short of the UK’s potential and reach only around 1.5% in the short term. | This trend is likely to remain for a while, with Brexit related uncertainties looming large for consumers and businesses. Our expectations are therefore for annual GDP growth to fall short of the UK’s potential and reach only around 1.5% in the short term. |
| 11.05am BST | 11.05am BST |
| 11:05 | 11:05 |
| Full story: GDP figures could lead to interest rate hike | Full story: GDP figures could lead to interest rate hike |
| Britain’s first interest rate rise since 2007 could be just round the corner, writes our economics correspondent Richard Partington: | Britain’s first interest rate rise since 2007 could be just round the corner, writes our economics correspondent Richard Partington: |
| British consumers are being put on notice for a rate hike from next week, as official figures show the economy expanding faster than anticipated in the three months to September. | British consumers are being put on notice for a rate hike from next week, as official figures show the economy expanding faster than anticipated in the three months to September. |
| GDP grew by 0.4% in the third quarter of 2017 following expansion of 0.3% in the three months to June, according to the Office for National Statistics. City economists had forecast growth of 0.3%. | GDP grew by 0.4% in the third quarter of 2017 following expansion of 0.3% in the three months to June, according to the Office for National Statistics. City economists had forecast growth of 0.3%. |
| The official figures come as the Bank of England prepares to hike interest rates for the first time in a decade, with the monetary policy committee likely to take them into account ahead of its decision on 2 November. Threadneedle Street has faced a slew of warnings against raising the cost of borrowing, amid growing concerns over the strength of the economy – which could be allayed by the latest data. | The official figures come as the Bank of England prepares to hike interest rates for the first time in a decade, with the monetary policy committee likely to take them into account ahead of its decision on 2 November. Threadneedle Street has faced a slew of warnings against raising the cost of borrowing, amid growing concerns over the strength of the economy – which could be allayed by the latest data. |
| Ruth Gregory, UK economist at the consultancy Capital Economics, said the latest figures “have probably sealed the deal on an interest rate hike next week.” | Ruth Gregory, UK economist at the consultancy Capital Economics, said the latest figures “have probably sealed the deal on an interest rate hike next week.” |
| Here’s the full story: | Here’s the full story: |
| 10.56am BST | 10.56am BST |
| 10:56 | 10:56 |
| You can keep up to speed on all the latest economic and business news with our daily email..... | You can keep up to speed on all the latest economic and business news with our daily email..... |
| 10.48am BST | 10.48am BST |
| 10:48 | 10:48 |
| Mihir Kapadia, CEO of Sun Global Investments, says Britain’s growth rate looks ‘subpar’, despite avoiding the recession that some experts predicted after the EU referendum. | Mihir Kapadia, CEO of Sun Global Investments, says Britain’s growth rate looks ‘subpar’, despite avoiding the recession that some experts predicted after the EU referendum. |
| He adds: | He adds: |
| The third quarter has been particularly difficult for the UK economy, with inflation ringing 3% while wage growth has been subdued. | The third quarter has been particularly difficult for the UK economy, with inflation ringing 3% while wage growth has been subdued. |
| Consumers are facing an increased squeeze in living standards while the city has been brought to its knees by the increased uncertainty over Brexit proceedings.” | Consumers are facing an increased squeeze in living standards while the city has been brought to its knees by the increased uncertainty over Brexit proceedings.” |