GDP figures - PwC's senior economic adviser comments

Published at 10:52 AM on 23 December 2015

In response to new GDP figures released today, Andrew Sentance, senior economic adviser, PwC, said:

"Economic growth has been revised down and is now likely to average around 2.2% for 2015 as a whole - lower than the growth of nearly 3% we saw in 2014. However, we should still see 2-2.5% growth in 2016 which is very respectable for the New Normal world we have inhabited since the financial crisis. The UK is still set to be the second fastest growing economy in the G7 - behind the US - this year and next.

"Disappointing performance in manufacturing and construction appears to have dragged down the recent growth figures. In the services sector, the quarterly growth rate has picked up as we have moved through the year. In four key areas of services - retail and distribution, transport and communications, hotels and catering and business and professional services - GDP is still over 4% up on a year ago. The figures on construction output have been very volatile and manufacturing should benefit from a stronger European economy next year. So it is still quite likely we will see more balanced growth as we move into 2016.

"On the demand side of the economy, consumer spending is 3% up on a year ago in real terms, investment spending has risen by 3.4% and exports are up 6.3%. The year-on-year growth of consumer spending is the strongest we have seen since 2007. The main elements of private sector spending are growing well at home and the demand for UK products and services remains strong abroad. This also bodes well for future growth prospects.

"So while the downward GDP revision is a disappointment, the UK economy is still set for a fourth consecutive year of growth over 2% in 2016, with unemployment continuing to fall and wages rising faster than prices - boosting disposable income and consumer spending."

ENDS


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