Spending in key retail and service sectors has fallen
Economic growth has fallen more sharply than predicted as Brexit-linked inflation begins to eat into consumers’ incomes.
In the first quarter of 2017, GDP growth has slowed to just 0.3 per cent, down from 0.7 per cent in the last quarter of 2016. It’s the lowest reading since this time last year and falls below the forecast of 0.4 per cent growth.
This is the most tangible indicator yet that Brexit is hitting consumer confidence. Spending in a number of key retail and services sectors has slumped, as rising inflation and slow wage growth take their toll.
Until now, the economic impact of Brexit hasn’t been as severe as predicted because consumer spending remained unexpectedly strong. If consumers are no longer willing or able to power the economy, the government will need to be much more pro-active in its economic approach.Sign up to Left Foot Forward's weekday email for the latest progressive news and comment - and support campaigning journalism by making a donation today.