- U.K.’s Economy Grows More than Expected After Brexit
The U.K.’s economy grew better than expected in the third quarter, after the country’s decision to leave the European Union in June.
The economy expanded by 0.5 percent in the third quarter of the year, lower than 0.7 percent recorded in the preceding quarter but higher than 0.3 percent expected by economists surveyed prior to the release.
According to the Office for National Statistics “There is little evidence of a pronounced effect in the immediate aftermath of the vote.”
In June, the Britons voted to leave the European Union, a decision most analysts have said will hurt and plunge the economy into recession. But the lower exchange rate has boosted economic activities in the services sector and encourage tourists spending.
“The fundamentals of the UK economy are strong and today’s data show that the economy is resilient,” said the Chancellor of the Exchequer, Phillip Hammond.
The services sector grew by 0.8 percent in the third quarter, but transport, storage and communication contributed the most to the sector, growing by 2.2 percent. Making it the fastest pace since the 2009 recession.
Although, the construction and production declined in the quarter. The strong performance will allow the Bank of England time to monitor the economic situation pending rate decision. Hence, its less likely the apex bank will cut interest rates this year.
“We believe that this reading is sufficiently strong to convince the Bank of England to refrain from easing monetary policy again next week,” said Alan Clarke, an economist at Scotiabank in London. “There is no need to panic.”