British economy accelerates in second quarter

LONDON: Britain’s economic growth picked up speed in the second quarter, official data confirmed Friday, but economists expressed concern about the longer-term impact of Brexit.

Gross domestic product (GDP) grew 0.6 per cent, the Office for National Statistics (ONS) said in a second estimate for April-June, which included the shock EU exit referendum towards the end.

That was unchanged from the initial estimate, and followed 0.4-per cent expansion in the first quarter.

“The reporting period for this release covers quarter 2 and therefore includes data for a short period after the EU referendum,” the ONS said.

“There is very little anecdotal evidence at present to suggest that the referendum has had an impact on GDP in Quarter 2 2016,” the ONS added in a statement.

The latest second quarter growth number was in line with market expectations.

Britons had voted on June 23 to leave the European Union in a surprise vote that sent markets tumbling and the pound slumping in its initial aftermath.

“The vote for Brexit occurred too late in the (second) quarter to have a significant impact on growth,” said IHS Global Insight economist Howard Archer.

However, he also warned it would be a “considerable time” before the economy would expand by “anything like 0.6 per cent” quarter-on-quarter.

“We suspect that the UK’s vote to leave the European Union in the 23 June referendum will significantly weigh down on UK economic activity for a prolonged period, primarily due to prolonged uncertainty over the outlook affecting business investment and employment,” Archer said.