THE current quarter and early months of 2018 look likely to “remain very hard work” for the UK economy, a leading think-tank warns.
Sounding this cautionary note, today, EY ITEM Club chief economic adviser Howard Archer declares UK growth is “unlikely to have got out of the slow lane” in the third quarter.
Mr Archer sees a “strong chance” UK gross domestic product growth could have been limited to 0.3 per cent for a third consecutive quarter in the three months to September, noting a “slight rise” to 0.4 per cent is possible.
Even quarterly growth of 0.4 per cent, equivalent to an annualised pace of 1.6 per cent, would be way adrift of a long-term average annual rate of expansion for the UK put at about 2.75 per cent by Bank of England Governor Mark Carney.
The Office for National Statistics is due to publish third-quarter growth figures next Wednesday.
Mr Archer said: “Third-quarter GDP growth is likely to have been helped by a markedly-improved performance from industrial production, as manufacturing output picked up. However, growth in the services sector appears to have been relatively weak.”
Weighing the outlook for the current quarter and the early months of next year, he added: “Consumer purchasing power is still being squeezed appreciably, while ongoing business concerns and uncertainties over Brexit are likely to limit investment. Hopefully, net trade can help growth as exports benefit from healthy global activity and a very competitive pound.”
The EY ITEM Club forecasts growth of 1.5 per cent for 2017 as a whole, and 1.4 per cent expansion next year.
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