Commenting on the first estimate of GDP for Q2 2017, published yesterday by the ONS, Nova Fairbank, Public Affairs Manager for Norfolk Chamber, said:
“The first estimate of economic activity for Q2 2017 of 0.3% on the previous quarter is broadly in line with our expectations, though slightly lower than our current forecasts
“UK economic growth remains unbalanced, with the service sector accounting for all of the growth recorded in Q2, while the industrial production and construction sectors were a drag on growth in the quarter.
“Inflation is likely to continue to rise in the coming months and this could trigger a marked economic slowdown by increasing the squeeze on consumer spending. Rising inflation together with continued uncertainty over the longer-term impacts of Brexit is also likely to stifle Norfolk business investment intentions.
“The recent Chamber Quarterly Economic Survey confirmed that Norfolk’s service sector, was the key driver of economic growth. But consumer-facing industries such as retail outlets and hotels reported weaker growth rates. Many Norfolk firms reported rising concern over raw material costs and pay settlements.
“Our view for the future growth of the UK economy remains slightly muted by historic comparison, with a combination of the uncertainty over Brexit negotiations, increased inflation caused by the depreciation of Sterling and an expected softening of both consumer spending and business investment over the coming year. Government can support confidence in the near term by being clearer over its desired outcome of the Brexit negotiations (and we applaud the softening of its stance over the past week) and by greater commitments to investment, particularly in infrastructure, as well as accelerating its plans for its new industrial strategy.”
