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British economy grew by 0.4 percent in three months to November: NIESR

Xinhua, December 8, 2016 Adjust font size:

Britain's economy grew by 0.4 percent in the three months to the end of November, according to estimated figures released by the National Institute of Economic and Social Research (NIESR) on Wednesday.

The London-based economic think-tank said that its monthly rolling-quarterly assessment of the state of the British economy showed growth unchanged from the figure for the three months to the end of October.

NIESR said that it stood by its November forecast for the British economy to grow by 2 percent in 2016, slowing to 1.4 percent annual growth next year.

Rebecca Piggott, research fellow at NIESR, told Xinhua: "This is largely driven by the service sector, supported by strong consumer spending. The retail sales data shows that retail sales was strong in October."

However, prospects for economic growth are dampened next year as the recent slide in sterling on the foreign exchange markets, largely triggered by the Brexit vote on June 23, feed through to prices on the street for consumers, resulting in higher inflation and lower consumption.

Piggott said: "Production, construction, agriculture and other sectors of the economy have seen quite a strong decline. This is not a cause for concern but we think this strong consumer spending will not continue; we are expecting quite high inflation next year and the following year as the sterling depreciation passes through and causes a drop in real consumer income."

NIESR forecast in its quarterly Britain's economic report at the start of November that the Consumer Price Index (CPI) inflation rate was expected to reach 3.8 percent by the end of 2017, rising from its current 0.9 percent (the latest figures, for October). Endit