The Brexit slowdown continues — Britain’s economy grew just 0.3% in the second quarter

Union jack
A young spectator watches the action with a Union Jack painted on his face during day two of the Sainsbury’s Anniversary Games at The Stadium – Queen Elizabeth Olympic Park on July 25, 2015 in London, England. Ian Walton/Getty Images

LONDON — Britain’s economy grew as expected in the second quarter of 2017, according to preliminary numbers from the ONS released on Wednesday.

GDP grew by 0.3% in the quarter, the ONS said, while annual growth was 1.7%.

Prior to the release economists had forecast 0.3% growth, representing a small increase from the 0.2% growth seen in the first quarter. Yearly growth was forecast at 1.7%.

The 0.3% growth in the second quarter marks the second slowest growth since the beginning of 2016, the ONS said.

“The growth in Quarter 2 2017 was driven by services, which grew by 0.5% compared with 0.1% growth in Quarter 1 (Jan to Mar) 2017,” the ONS said.

“The largest contributors to growth in services were retail trade, which improved after a fall in the first quarter, and film production and distribution.”

“The economy has experienced a notable slowdown in the first half of this year,” ONS Head of GDP Darren Morgan said.

“While services such as retail and film production & distribution showed some improvement in the second quarter, a weaker performance from construction and manufacturing pulled down overall growth.”

It should be noted that these figures are preliminary, and could be revised higher or lower in the coming months.

“The services aggregate was the main driver to the slower growth in GDP, contributing 0.23 percentage points. Production, construction and agriculture contributed 0.04, 0.01 and 0.00 percentage points to the headline figure respectively,” it said in a statement.

Here is the chart showing the quarter as part of the longer term trend:

Screen Shot 2017 07 26 at 09.34.26

Until the beginning of 2017, the UK economy fared better than all but the most optimistic of forecasters imagined in the immediate aftermath of the Brexit referendum, confounding predictions of an immediate recession, and virtually ignoring any uncertainty over the future.

However, as the falling pound has pushed up inflation in recent months, regular Brits have started to feel the pinch, spending less, and slowing the consumer boom that has fuelled the country’s economic performance in the past handful of years.

Despite disappointing in the quarter, UK GDP has now grown in 18 consecutive quarters. The last time UK GDP shrunk over a quarter came in Q4 of 2012 when the economy readjusted to normality following a huge boost from the 2012 Olympic Games in London.

More follows …