According to detailed figures published by the Office for National Statistics, better than expected business investment and consumer spending drove UK economic growth in the three months following the EU referendum. Business investment covers the creation of new non-financial assets such as buildings, machinery and intellectual property. The effect of the Brexit vote on business investment has been widely deliberated and the growth increase will come as a surprise to many as a result of the uncertainty about future trade deals. The increase in GDP was explained by household consumption increasing 0.7 per cent, government consumption growing by 0.4 per cent and the UK’s trade deficit narrowing slightly compared with the previous quarter. According to a report in the Financial Times, Pro-Leave politicians have been angered by the largely negative Brexit forecasts, particularly by the Treasury and Office for Budget Responsibility which produces independent forecasts for the UK government and predicts that “reductions in business investment would reduce the country’s long-term economic potential by 1.1 per cent by 2018”.
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