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UK 'to tackle Brexit test from a strong economic position'

By John Mulgrew

Published 28/07/2016

Angela McGowan is confident the economic impact of Brexit will be contained
Angela McGowan is confident the economic impact of Brexit will be contained

The UK will "tackle the Brexit challenge" from a strong position amid higher than expected growth, one economist here has said.

The economy picked up pace in the run-up to the Brexit vote thanks to the strongest performance from industrial production since 1999 - with GDP growing by 0.6% in the second quarter of this year.

That was up from 0.4% in the first quarter, according to the Office for National Statistics (ONS).

Danske Bank's chief economist Angela McGowan said the "level of growth suggests that the UK will be tackling the Brexit challenge from a relatively strong position, which is a good thing".

"When talking to business customers this week I have pointed out that the government and the Bank of England have policy levers to use when the economy splutters or stalls after economic shocks," she said.

"These levers include monetary policy adjustments such as interest rate changes or quantitative easing and fiscal measures such as tax adjustments and public spending.

"I am confident that policy makers will use all the tools available to ensure the economic impact of Brexit will be contained as much as possible."

However, these figures "do not provide a definitive answer to the possible impact of Brexit uncertainty on UK economic growth", according to PwC's chief economist Dr Esmond Birnie.

The higher than expected figure was driven in part by a swing in industrial production, which rose 2.1% over the period, which matched figures last seen 17 years ago.

The UK's dominant services sector grew by 0.5% in the second quarter, edging down from 0.6%.

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