UK Economy Fights Back Despite Brexit Fears

Gross Domestic Product (GDP) is a way to measure economic growth and how well the economy is doing. GDP is a way of calculating the combined value of goods and services produced in the country and the value they were purchased at. This can show whether the economy has grown because the output measure represents each sector of the economy. In the second quarter of 2016, from the period in between April to June, the Office for National Statistics reported that the GDP was at 0.7%. This was during the EU referendum campaigning period, where there was uncertainty but expectation that Britain would remain a member of the European Union. Therefore, Brexit would have been a non-existent factor, which would have caused the GDP to be at its rate. In the third quarter, July to September, the GDP was 0.5%. This was calculated as an average between the GDP value of agriculture, production, construction and services. Agriculture was -0.01%, production was -0.05% and construction was -0.09%. Despite this indicating the economy would shrink, the services sector actually grew (0.64%) meaning the combined average of the GDP was 0.5%. This has so far been seen as being positive because some economists didn’t expect the economy to grow beyond 0.3% and the Bank of England initially forecasted growth of 0.2%. As a result, the economy has beaten expectation and is in a good position but it failed to match the growth of the last quarter (0.7%), so it could be indicating the economy is now growing slowly.

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