Posted on Thursday 26 January 2017 by ub digital
The UK economy has shown renewed resilience in the wake of Brexit vote by securing its place as the fastest-growing major advanced economy in 2016.
The accolade comes after the release of GDP statistics from the Office of National Statistics which showed the economy increased by 0.6% in the fourth quarter of last year, a figure which takes growth for the year to 2%.
Although the full-year figure is down on the 2.2% recorded in 2015, it has still confounded expert expectations that the vote to leave the European Union would seriously dent economic growth.
Much of the growth was accounted for by the services sector, particularly from retail sales and travel agency services with both manufacturing and construction unchanged on the year.
However, 2017 could be more challenging, according to Rain Newton, the CBI chief economist.
“2017 will see headwinds to growth building, as higher inflation eats into households’ buying power and investment wanes,” she said. “As the UK economy enters a more challenging environment, the government’s recent commitment to a new Industrial Strategy will be an important step to ensuring that prosperity reaches all parts of the UK.”
Separate figures aren’t released for Northern Ireland but the ONS did release regional figures for 2015 earlier in January.
They showed productivity per worker here is the second-lowest of all UK regions at 80.9% of the UK average.
Worryingly, that figure has been declining steadily since 2007.
Dr Esmond Birnie, Senior Economist at Ulster University Economic Policy Centre, said a reality check is in order.
“What can be done about the productivity gap?” he said. “In the first instance, recognize this is a longstanding problem- people were talking about it in the 1950s.
“A quick fix may not be possible but we should at least take the first steps. Notwithstanding some recent progress, more needs to be done in terms of apprenticeships, improved management skills and better commercialization of innovation.”