London: Consumers and businesses increased their spending in the third quarter as the UK economy registered a resilient performance following the Brexit vote.
Household spending rose 0.7 percent from the second quarter and business investment increased 0.9 percent, the Office for National Statistics said yesterday. Growth overall was unrevised at 0.5 percent, with trade providing the strongest contribution. A separate report from the Confederation of British Industry showed retail sales grew at their fastest annual pace in more than a year in November.
The ONS report covers the first full quarter of gross domestic product since Britons upended UK politics and roiled financial markets by voting to leave the European Union. While there are few signs of any significant effect for now, growth is expected to slow next year.
In its twice-yearly review, the Office for Budget Responsibility on Wednesday slashed its 2017 forecast to 1.4 percent from 2.2 percent, saying uncertainty will lead firms to delay investment while the falling pound squeezes consumers by pushing up the cost of imports.
“Investment by businesses held up well in the immediate aftermath of the EU referendum, though it’s likely most of these investment decisions were taken before polling day,” said ONS statistician Darren Morgan. “That, coupled with growing consumer spending fueled by rising household income, and a strong performance in the dominant service industries, kept the economy expanding broadly in line with its historical average.”
