The economy of the United Kingdom grew at half the rate Eurozone`s, especially during the second quarter of the year, as the Brexit-inspired increase in inflation compromised consumer spending. A second review of the official figures from the Office for National Statistics recently showed that the economy of the UK increased by 0.3% in an average of 12 weeks to the end of June.
Earlier this month, the estimated growth for the same duration in the Eurozone, average at 0.6%.The British economy has so far shown an immense amount of resilience following Brexit last June. It comprised of an expansion level that averaged at 0.5% in the third quarter of the year and 0.7% in the final quarter. However, the recent increase in inflation, caused by a dramatic sell off in the Pound versus the Euro, the US dollar, and various other currencies, has undermined consumer spending and increased the growth rate levels of the UK to its lowest in the G7 member club.
Various experts and economic analysts have recently reduced their market growth predictions for the entire year, and several predict that the pound could still fall further.
“Taken into perspective the coming few months won’t exactly be a downhill task for this country,”this according to Samuel Tombs, who is a major economist at Pantheon. According to Tombs, the probable growth of this economy averages at 0.2% in the final quarters of this year
“ The notable reduction in the amount of consumer confidence in the past has shown the people will not continue to reduce their saving rates,” Furthermore, tombs adds that he expects the Brexit risk to increasingly undermine the performances of business and any investments as well.
John Hawksworth, who is an expert at PwC, also had some important insights to provide. According to him, he also predicts a weak growth to continue in the final quarters of the year. “ Having said that, this slowdown should be converted in a full blown recession based on the fact that employment levels remain strong and government spending is now improving as well,” he said.
More so, Ian Stewart who is an expert at Deloitte, also pointed out the expects `subpar economic performance`over the next few coming months. According to him, manufacturing and exports may go a long way in offsetting the headwinds from the smaller consumers.
Separate data recently demonstrated that British Household spending increased to its weakest point ever since late in 2014 to June of 2017, and compounded by a Weak Pound.The yearly spending rated reduced to 2 percent from an average of 2.5 percent, after increasing by just an average of 0.1 percent in the Second quarter of the year. In mid of this year, the International Monetary Fund mentioned that it expects the economy of the country to grow by an average of 1.7% in 2017, as when compared to the previous forecast that averaged at 2%.
The Centre for Economics and Business research also predicts that the economy of the UK will grow by an average of 1.3% in 2017, thereby highlighting a substantial improvement from the earlier prediction level that averaged at 1.7%.The official inflation level of the country averaged at just 2.6% in July, from an average of 0.6% in the previous year.