A slowdown in Britain’s growth in the second quarter means that the economy is weaker than thought and has no chance of meeting its official growth target this year.
The eagerly awaited preliminary GDP estimate for April to June showed the economy growing by 0.2%, rather than contracting. Although this was better than some of the gloomier forecasts, it is still slower than the 0.5% growth seen in the first quarter, which came after a 0.5% decline in the fourth quarter of last year. City economists and thinktanks warned that the Office for Budget Responsibility would have to revise down its 1.7% growth forecast for this year.
Will Straw, associate director of Institute for Public Policy Research (IPPR), estimates the UK will grow by just 1.2% this year.
The weak growth is fuelling fears that Britain could lose its AAA credit rating unless the economy picks up sharply in the third quarter