UK business investment dropped 0.7 per cent during the second quarter, official figures show, with Brexit uncertainty viewed by economists as a key factor.
The quarter-on-quarter tumble is revealed in the latest seasonally adjusted gross domestic product data from the Office for National Statistics, and follows a 0.5% fall in the first quarter of 2018. The latest decline meant business investment in the second quarter was 0.2% lower than in the same period of last year.
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The ONS, which had estimated previously that business investment increased by 0.5% in the second quarter, has confirmed its earlier estimate that UK GDP grew by 0.4% in the second quarter. However, it revised UK growth in the first quarter from 0.2% to 0.1%.
Its latest figures show UK household spending grew by 0.4% in the second quarter. UK exports fell by 2.2% during the three months to June. UK manufacturing output fell 0.7% in the second quarter. Services output rose 0.6%, and construction grew by 0.8%.
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Howard Archer, chief economic adviser to the EY ITEM Club think-tank, said: “Business investment disappointingly fell 0.7% quarter-on-quarter in the second quarter, which was a second successive decline. This suggests businesses were cautious over investment due to mounting Brexit uncertainty.”
Mr Archer is forecasting UK growth of 1.3% for 2018 as a whole, down from 1.7% in 2017. This would be the UK’s weakest performance since 2009.
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