Quarterly growth not likely to maintain momentum

Posted on 22 Nov 2018 and read 327 times
Quarterly growth not likely to maintain momentumCommenting on the first estimate of GDP for Q3 2018 (published by the ONS), Suren Thiru — head of economics at the British Chambers of Commerce — said: “While the pick-up in GDP growth in the third quarter is welcome, the stronger headline figure masks a loss of momentum through the quarter from a particularly strong July, when a number of temporary factors — including the heatwave and the World Cup — boosted activity.

“The services and construction sectors were the strongest performers in the quarter.

“However, the fall in business investment is a concern, as it stifles productivity and growth.

“However, measures such as the increase in the Annual Investment Allowance announced in the Budget should provide a lift to investment over the near term, although it remains likely that the stronger growth recorded in the third quarter is a one-off for the UK economy, with persistent Brexit uncertainty and the financial squeeze on consumers and businesses likely to weigh increasingly on economic activity in the coming quarters.

“With inflation on a downward trajectory and the UK’s growth outlook subdued, there remains sufficient scope for the Bank of England to keep interest rates on hold for some time yet.

“To ease the extent of current uncertainty, the Government must deliver a comprehensive Brexit deal that gives firms the clarity and precision they need.”

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