Economic growth revised down as inflation puts squeeze on consumer spending

Is Brexit finally starting to bite? New figures released this morning show that consumer spending increased at the slowest pace since the end of 2014, forcing down the official economic growth rate to 0.2 per cent in the first quarter of this year.

The news surprised economists and analysts. According to Reuters, only one of 42 expected this. Nevertheless, the data from the Office for National Statistics (ONS) is down from an initial estimate of 0.3 per cent. In the final quarter of 2016, there was a rise of 0.7 per cent.

Neil Wilson, senior analyst at EXT Capital, said: ‘The rather ugly set of growth figures suggest that post-Brexit resilience may not be all it’s cracked up to be. Household spending is slowing, inflation is rising and wages are not keeping pace – the consumer-led bounce since last June could just about be running out of steam.