Is the UK going to dodge a Brexit recession? The economy GREW over the summer driven by the television and film industry – but manufacturing continues to struggle amid ongoing uncertainty
- GDP grew by 0.3% between June and August compared with previous quarter
- The economy dipped by 0.1 per cent during the school holidays in August
- But experts said the three-month data suggests the UK will avoid a recession
Britain could avoid falling into recession ahead of Brexit after encouraging economic figures were released today.
UK GDP grew by 0.3 per cent between June and August compared with the previous three months, driven by a boom in television and film production, the Office for National Statistics (ONS) said.
The figure, a boost from growth of 0.1 per cent in the three months to July, came despite continued poor performance among manufacturers as the market attempts to prepare for Brexit.
The economy dipped by 0.1 per cent during the school holidays in August, following 0.4 per cent growth in July.
But quarterly figures are seen as less volatile and experts said the three-month data suggests the UK will eke out growth overall in the third quarter.
This would mean the UK avoids a technical recession, following the 0.2 per cent contraction in the second quarter, driven by the abandoned Brexit date of March 29.
Shadow chancellor John McDonnell blasted the figures, saying: ‘The effects of the Government’s failure are being felt across the economy but especially in our manufacturing sector’
David Cheetham, chief market analyst at XTB, said: ‘Following the contraction seen in the second quarter, this means that another negative reading for the third quarter is not at all likely, although growth remains tepid at best.’
The ONS figures showed robust expansion in the services sector helped offset a drop in manufacturing activity.
Services output grew 0.4 per cent in the three months to July, while manufacturing dropped 0.4 per cent and construction edged 0.1 per cent higher.
Rob Kent-Smith, head of GDP at the ONS, said: ‘Growth increased in the latest three months, despite a weak performance across manufacturing, with TV and film production helping to boost the services sector.’
However shadow chancellor John McDonnell blasted the figures.
‘The effects of the Government’s failure are being felt across the economy but especially in our manufacturing sector,’ he said.
‘The Conservatives’ dangerous No Deal Brexit comes on the back of a decade of cuts and a failure to invest to tackle the long-term challenges for the economy.’