GDP data, August 2016 - PwC comments

Published at 10:28 AM on 26 August 2016

In response to new GDP data released today, John Hawksworth, chief economist at PwC, commented:

“Today's data confirms that the UK economy grew by a solid 0.6% in the second quarter, shrugging off pre-referendum nerves. Steady services growth and a bounce back in industrial production more than offset continued weakness in the construction sector.

“Domestic demand led the way, with consumer spending growth remaining strong at 0.9% and business investment rising again after two quarters of decline. These are only preliminary estimates, but it seems as if the global economic uncertainties around the turn of the year may have had more of a dampening effect on UK investment than the uncertainty during the referendum campaign. As these global uncertainties eased during the second quarter, so investment edged up again.

“This strong domestic demand growth also sucked in more imports, widening the trade gap as export volume growth remained subdued in the second quarter. The weakening of the pound since the referendum could help to close this trade gap to some degree, although it will also dampen consumer spending growth by squeezing real incomes as import prices rise.

“We will have to wait until late October for the first official GDP estimates for the third quarter, but today's data confirms that the UK economy was in reasonable shape going into the referendum vote, while other recent data suggests that the consumer side of the economy held up reasonably well over the summer.”

Ends.

For further information please contact Tilly Parke: tilly.parke@uk.pwc.com / +44 20 7804 8761


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