Britain's economy hit by Brexit concerns

Britain’s economy has been hit by fears around the impact of the country leaving the European Union. Thomas Trutschel / Photothek via Getty Images

Britain’s economy, buffeted by fears about what a future outside of the EU may hold, grew by just 0.3% in the second quarter of 2017, according to the latest GDP figures released Wednesday morning.

Of the three major sectors of the economy, only services grew during the three-month period which ended in June; it grew by 0.5%, while industrial production fell by 0.4% and construction shrunk by 0.9%.

Although the figures are in line with City expectations, coupled with first quarter growth of 0.2% it shows that the economy is in a fragile state. In the last four quarters, GDP has risen by 1.7%. Commenting on the figures, Darren Morgan, head of national accounts at the Office for National Statistics, said: “The economy has experienced a notable slowdown in the first half of this year. While services such as retail, and film production and distribution showed some improvement in the second quarter, a weaker performance from construction and manufacturing pulled down overall growth.”

One of the few bright spots in the economic picture was the growth in the film industry, which added almost 0.1% to growth - this was put down to more films being in production in British studios as well as higher tickets sales driven by Wonder Woman and the latest instalment in the Pirates of the Caribbean franchise.

Philip Hammond, the chancellor of the exchequer, said: “Our economy has grown continuously for four-and-a-half years, delivering record levels of employment. We can be proud of that; but we are not complacent.

“We need to focus on restoring productivity growth to deliver higher wages and living standards for people across the country. That is why we are committed to investing in infrastructure, technology and skills to deliver the best possible base for strong future growth.”

There was rare good news on the economic front yesterday for the government when German carmaker BMW confirmed that they would be making the new electric Mini in the UK at its plant in Cowley in Oxford. CBI, the business lobby group, also announced that production in the manufacturing sector was growing at its fastest rate since the 1990s.