0.4% growth in UK economy
Wednesday 25 October 2017
DR GORDON Fletcher, retail and finance expert at the University of Salford Business School, comments on figures out today which show that the UK economy grew by 0.4% in the last quarter.
That was slightly higher growth than expected and has increased speculation that the Bank of England may increase interest rates after its next meeting in November.
Dr Fletcher said: “The 0.4% increase in GDP this quarter is a story of two halves. With the announcement the pound then rallied against the US dollar. The result also contributes to the continuous growth in the economy that has been experienced since the recovery from the Credit Crunch ten years ago.
“However, growth is now weaker compared to the other major European economies and could itself be seen as tangible result of a 'Brexit effect'. The past decade has also been a time of historical low interest rates and now concern will turn towards the prospect of an imminent rise in this rate. A rate rise could then be a disincentive in a relatively weak economy to further business growth and expansion. It is a fine balance.
“On the high street and in homes GDP results need to be reflected in an improving cost of living and increasing wages. The prospect of higher interest rates will neutralise any benefits that could be found with an improving GDP.”
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Sam Wood
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