The pressures on the UK economy from EU referendum jitters and a downturn in global trade will be revealed this week with the publication of official UK growth figures due on Wednesday.
Nervous investors and policymakers are also keenly awaiting GDP updates from the US and eurozone to gauge the scale of a global slowdown that has prompted wild swings on stock markets in recent months and warnings from the International Monetary Fund that governments need to step up public investment to avert a slump, Reuters reported.
The UK figures are expected to show a marked slowdown in growth after business surveys have pointed to companies delaying spending and hiring ahead of the Brexit vote. Official figures showing a drop in retail sales last week suggested consumers, the main drivers of the UK’s post-crisis recovery, were also cutting back as pay growth flat-lines and government spending cuts bite.
Economists anticipate that those factors dented the economy’s overall performance in the first quarter, cutting the GDP growth rate to 0.4% from 0.6% in the final three months of 2015, according to the consensus forecast in a Reuters poll.
Economists at HSBC are more downbeat than the consensus and they forecast the growth rate halved in the first quarter to 0.3%.
“All the signs are that growth slowed in the first quarter,” they wrote in a research note.
They cite last week’s news of a sharp fall in retail sales in March, downbeat surveys from the wider services sector and a drag on the economy from manufacturing and the oil and gas sectors.
Philip Shaw, economist at Investec is expecting a “mixed picture” from the UK economy.
