NIESR: Director Jagjit Chadha reacts to the ONS growth figures for Q2 released this morning

27 Jul 2017 11:30 AM

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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