LONDON (Reuters) - British economic growth probably lost some pace in the three months to February and the extent of a slowdown ahead depends in large part on how much exports can make up for weaker consumer spending, a think tank said on Friday.
Britain’s economy, which last year shrugged off the Brexit vote, expanded by 0.6 percent in December-February period compared with 0.8 percent in the three months to January, the National Institute of Economic and Social Research (NIESR) said.
“Robust consumer spending growth has supported the economic expansion throughout 2016, but there are now signs that this support is beginning to soften,” Rebecca Piggott, a research fellow at NIESR, said.
“Consumer price inflation is expected to continue to increase throughout the rest of 2017, further reducing the contribution from consumer spending to economic growth.”
Piggott said it remained to be seen how much the economy would be cushioned by an expected improvement in British trade of goods and services which have gained competitiveness after the fall in the value of the pound since the Brexit vote but which has also pushed up inflation.
Earlier on Friday, the Office for National Statistics said British manufacturing contracted by 0.9 percent in January compared with December. But over the November-January period, factory output had its strongest performance since the three months to May 2010, helped by the fall in sterling.
Reporting by William Schomberg; editing by Alistair Smout