National Statistics published data on the UK’s GDP in the second quarter of 2016. Figures have beaten estimations, indicating higher-than expected economic growth in the past three months. Analysts do however warn that the increase will not last in a post-Brexit economy.
Gross Domestic Product grew by 2.2% this quarter compared to the same period last year. The rate is 0.2% higher than last month’s figure and beats analysts estimates who believed the rate would remain flat.
National statistics also reported 0.6% growth in GDP compared to last month, exceeding estimates by 0.2 percentage points and improving from June’s figure of 0.4% growth.
While growth has been unexpectedly strong in the second quarter, analysts at Lloyds Bank predict stagnation for the rest of the year due to last month’s Brexit vote revealing its’ growing impact on the UK economy.
Lloyds Bank analysts report:
“Following revisions in the Q1 Quarterly National Accounts release at the end of June, the estimated pace of growth for Q2 stands out as unusually firm, not least in the context of pre-referendum uncertainty widely assumed to gnaw on growth. The official estimates are notably in some contrast to the slowing economic momentum indicated by, for example, surveys of purchasing managers.”
“Once more data are available on actual activity in June, a downward revision is possible, notably to industrial output. Moreover, the comparatively strong outturn for Q2 points to some compensating weakness in Q3 GDP overall. On the basis of the very early evidence for July so far, we would expect GDP growth to stagnate over Q3 and likely over the second half of the year.”
