24th November 2017.

Household Spending Boost Props Up GDP

The UK economy has continued to expand in the third quarter, official figures yesterday confirmed, thanks to a rebound in household spending and modest levels of business investment.

Despite a far gloomier forecast from the Office for Budget Responsibility (OBR) earlier in the week, the Office for National Statistics  (ONS) recently confirmed that the Pound has grown by 0.4 per cent between July and September.

This is despite the persistent squeeze on household finances from higher inflation, high interest rates, and muted wage growth.

Business investment also experienced a mild rise in the third quarter, growing by 0.2 per cent to £43.8 billion.

Howard Archer, chief economic advisor to the EY Item Club think-tank, discouraged people from assuming this meant the country’s problems were over.

“Consumer purchasing power is still being squeezed appreciably while business concerns and uncertainties over Brexit and the economy are hampering investment. The UK economy is far from racing ahead.”

Retail sales were reported to have rebounded after reports of a serious decline. The new data from ONS however expects a deterioration in the months leading up to Christmas.

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