Britain’s economy slowed in the first three months of the year and again leaned on the services sector for growth. As Grace Pascoe reports, the looming vote on the EU referendum is thought to be a key factor.
UK economy slows – Brexit likely cause
Junior doctors are staging a two day strike in England.
A new contract being imposed by the government isn’t popular.
(SOUNDBITE) (English) JOE MAYHEW, STRIKING JUNIOR DOCTOR SAYING:
“None of us want to strike, we’d all rather be caring for patients at work, but unfortunately we feel this is the only option available to us.”
(SOUNDBITE) (English) CHARLOTTE WARREN, STRIKING JUNIOR DOCTOR, SAYING:
“I just think there is a pervasive feeling of being quite downtrodden.”
Britain isn’t on its sick bed yet but the economy is slowing.
The Office of National Statistics says first quarter GDP grew by 0.4 percent – down from 0.6 percent at the end of last year.
It says it has no evidence the slowdown was linked to the uncertainly over EU membership
But business surveys have suggested the Brexit debate is having an impact on activity and investment
(SOUNDBITE) (English) CCLA, CHIEF INVESTMENT OFFICER, JAMES BEVAN, SAYING:
“I don’t think a slowdown in the UK growth numbers is a surprise either in the context of the uncertainties brought in by the Brexit debate nor indeed in the context of the global economy, and the reality is that Britain has a relatively low productivity trajectory because of its high dependency on services.”
Output in the three months to March matched the previous quarter at just over 2 percent.
That was higher than a year earlier and stronger than economists expected.
But quarterly growth was again driven by the services sector – industrial output and construction both fell.
It all makes Britain’s large current account deficit harder to payoff
And financing it could become trickier if Britain leaves the EU
That’s the new warning from the OECD.
It predicts Britain’s economy will be 3 percent smaller by 2020 if it votes to leave.