The UK economy has grown by 0.5 percent in the months following the June referendum, despite fears of an economic slowdown as a result of Brexit.
According to the latest UK GDP figures, the economy has shown better-than-expected growth rates of 0.5 percent, compared to the 0.3 percent initially forecast by analysts. This also contradicted initial gloomy predictions of 0.1 percent forwarded by the treasury in the run up to the Brexit vote. Despite the somewhat promising figure, this is a decrease from the 0.7 percent levels of growth prior to the referendum result.
The statistics reveal that the UK’s service sector was the only industry to see growth in the last three months and continues to make up three quarters of the British economy. According to the data, service sector output grew by 0.8 percent in the three months to September. Conversely, construction decreased by 1.4 percent, as did Agriculture by 0.7 percent and and manufacturing by 1 percent.
The head of the Office for National Statistics (ONS), Joe Grice, commented:
“there is little evidence of a pronounced effect in the immediate aftermath of the vote”.
Chancellor Phillip Hammond also welcomed the news, tweeting the following statement:
Here’s my response to today’s @ONS GDP figures. pic.twitter.com/GGdt0UCFkr
— Philip Hammond (@PHammondMP) October 27, 2016
Many economists maintain that Britain will only begin to experience the full ramifications of Brexit after negotiations begin.
The general secretary of trade union TUC urged the Government to put in place more measures to halt the shrinking of the manufacturing sector.
Frances O’Grady commented:
“We can’t yet say what impact Brexit will have on our economy, but these figures show there’s no room for complacency. British manufacturing is still struggling, and now faces real uncertainty following the vote to leave the EU.
“The government must use next month’s Autumn Statement to boost Britain’s jobs and wages. This means investing in infrastructure like roads, rail and homes, and raising the national minimum wage.”
The announcement caused the pound sterling to rebound slightly to $1.224, an encouraging development for the currency which has been under particular pressure as a result of continued Brexit uncertainty.