How has the UK economy performed in Q1?<\/strong><\/p>\nThe Office for National Statistics (ONS) estimates UK GDP to have grown by 0.4% in the first quarter of 2016 – a slowdown compared to the 0.6% quarterly growth rate recorded previously.<\/p>\n
Recent business surveys suggest nervousness amongst firms in the run up to the UK’s referendum on its EU membership, which may be prompting companies to postpone investment and hiring plans.<\/p>\n
This was also evident in the business investment figures in the second half of last year and the most recent labour market statistics, which show a severe slowdown in employment growth.<\/p>\n
Within the details of the GDP report, all of the growth in the first quarter came from the services sector which grew by 0.6%. Production, including manufacturing, contracted by 0.4%, while construction also contracted 0.9%.<\/p>\n
The estimates released today are preliminary estimates, and may be revised up or down.<\/p>\n
Has Brexit fears hit UK growth?<\/strong><\/p>\nHowever, it appears that the economy has hit a speed bump. Growth is likely to remain sluggish until the result of the referendum is known.<\/p>\n
If the UK votes to remain in the EU (our central view) then growth is likely to accelerate significantly in the second half of the year.<\/p>\n
If, however, the UK votes to leave, then growth is likely to slow further on the back of the added uncertainty for businesses. For more on our analysis on the impact of a vote for Brexit see our article on The risks of Brexit.<\/p>\n
Meanwhile, the Bank of England is in no rush to raise interest rates. Assuming the UK votes to remain in the EU, the Bank will then want to see evidence of a rebound in growth and higher inflation before considering raising interest rates. This may not happen until the end of this year or start of next.<\/p>\n
Source: ETFWorld.co.uk<\/div>\n","protected":false},"excerpt":{"rendered":"
The UK economy appears to have hit a speed bump and we believe that growth is likely to remain sluggish until the result of the referendum is known…..<\/p>\n","protected":false},"author":3,"featured_media":17266,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"telegram_tosend":false,"telegram_tosend_message":"","telegram_tosend_target":0,"footnotes":"","_wpscp_schedule_draft_date":"","_wpscp_schedule_republish_date":"","_wpscppro_advance_schedule":false,"_wpscppro_advance_schedule_date":"","_wpscppro_dont_share_socialmedia":false,"_wpscppro_custom_social_share_image":0,"_facebook_share_type":"","_twitter_share_type":"","_linkedin_share_type":"","_pinterest_share_type":"","_linkedin_share_type_page":"","_instagram_share_type":"","_medium_share_type":"","_threads_share_type":"","_google_business_share_type":"","_selected_social_profile":[],"_wpsp_enable_custom_social_template":false,"_wpsp_social_scheduling":{"enabled":false,"datetime":null,"platforms":[],"status":"template_only","dateOption":"today","timeOption":"now","customDays":"","customHours":"","customDate":"","customTime":"","schedulingType":"absolute"},"_wpsp_active_default_template":true},"categories":[37],"tags":[],"class_list":["post-15386","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uk-analysis"],"blocksy_meta":{"styles_descriptor":{"styles":{"desktop":"","tablet":"","mobile":""},"google_fonts":[],"version":6}},"_links":{"self":[{"href":"https:\/\/www.etfworld.com\/co.uk\/wp-json\/wp\/v2\/posts\/15386","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.etfworld.com\/co.uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.etfworld.com\/co.uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.etfworld.com\/co.uk\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.etfworld.com\/co.uk\/wp-json\/wp\/v2\/comments?post=15386"}],"version-history":[{"count":0,"href":"https:\/\/www.etfworld.com\/co.uk\/wp-json\/wp\/v2\/posts\/15386\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.etfworld.com\/co.uk\/wp-json\/wp\/v2\/media\/17266"}],"wp:attachment":[{"href":"https:\/\/www.etfworld.com\/co.uk\/wp-json\/wp\/v2\/media?parent=15386"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.etfworld.com\/co.uk\/wp-json\/wp\/v2\/categories?post=15386"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.etfworld.com\/co.uk\/wp-json\/wp\/v2\/tags?post=15386"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}