This was their response
Commenting on the preliminary UK GDP figures for Q1 2017, published today by the Office for National Statistics (ONS), Suren Thiru, Head of Economics at the British Chambers of Commerce (BCC), had this to say on Friday: “The preliminary estimate of UK GDP growth indicates that the UK economy suffered a slight loss of momentum in the first quarter of the year, following a strong end to 2016. That said, quarterly growth of 0.3 per cent is still in line with the average over the past decade.
“The main reason for the slowdown were declines in output from consumer-focused industries such as retail and hotels – further evidence that higher inflation is dampening consumer activity. However, the service sector was still the main driver of the economic activity in the quarter, with industrial production and construction sectors adding little to overall UK growth.”
“It is increasingly likely that the slowdown in the first quarter is the start of a sustained period of more sluggish growth. Inflation is expected to continue to rise, increasing the squeeze on consumer spending power and firm’s profit margins, pushing growth lower.”
“The BCC’s own Quarterly Economic Survey confirms that inflation is a key risk to the UK’s growth prospects, with businesses under increasing pressure to raise prices. Uncertainty over the impact of Brexit and the distraction of a General Election are also likely to weigh on economic activity over the near term.”
“With the UK economy set to enter a more challenging period, it is vital that more is done to address the longstanding domestic issues, including the chronic skills shortages and the escalating burden of upfront business costs, that continue to undermine the UK’s long-term growth prospects.”
The CBI on Friday commented on the latest GDP statistics, saying the UK economy grew by 0.3 per cent in the first quarter.
Although, Rain Newton-Smith, CBI Chief Economist had this to say: “GDP growth has eased compared to the second half of last year, with weakness particularly apparent in consumer-facing services.”
“This chimes with signs that some of the recent supports to growth are softening. In particular, real wage growth has deteriorated, as inflation is now running up against earnings growth. With inflation set to continue rising, the pressure on household incomes will weigh on consumer spending.”
“As the UK looks to redefine its role in the world, the next government must deliver an Industrial Strategy that build on our already solid foundations. A focus on improving openness, innovation and inclusivity will boost productivity and living standards, helping to make us the most competitive economy in the world by 2030.”
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