NIESR: Director Jagjit Chadha reacts to the ONS growth figures for Q2 released this morning
National Institute Director Jagjit Chadha yesterday reacted to the ONS growth figures for Q2 released this morning.
National Institute Director Jagjit Chadha said: “The preliminary ONS release for GDP growth in the second quarter of 2017 at 0.3% was exactly in line with the Institute’s real-time forecast published earlier this month and, as with the first quarter, remains far below the traditional level of capacity growth in the UK of around 0.5-0.6% per quarter”.
He added: “that although the contribution from services was welcome the fall in the contribution from manufacturing and construction was a concern given last year’s large depreciation in sterling but may have been a response to the larger than anticipated contributions in the first quarter of this year. As a preliminary release we treat the data release with caution but it does continue to suggest sluggish growth in output this year”.
He concluded that: “And so the economy will probably continue to perform at sub-par levels and this importantly this implies only a minor improvement in income per head this year, which is a better measure of welfare than GDP alone. Indeed there are signs that for many households consumption will be crimped as the year progresses with a fall in real disposable income and credit availability drying up”.
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