The 2Q2017 GDP grew as expected but continued to experience a Brexit-based struggle. GDP grew by 0.3% q/q, while annual growth was 1.7% y/y. We feel the GDP growth has slowed markedly in the 1H2017 despite relatively robust services growth which was dragged by weak performances from manufacturing and construction.

The latest GDP data showed that the UK economy registered the slowest growth amongst G7 countries in 2017 partly due to Brexit risks, which dampened business investment, and a weak pound, which hurt consumers more than it has helped exporters. Until the start of 2017, we found the economy had performed better. However, the Brexit referendum and weak pound raised inflation in recent months, and with low wage growth has eroded household spending which in turn took a hit on its GDP.

• Although the 2Q2017 GDP grew as expected, it continued to experience a Brexit-based struggle. GDP grew by 0.3% q/q, while annual growth was 1.7% y/y. We found the 0.3% q/q growth in 2Q2017 marked the second slowest growth since the beginning of 2016.

• We feel the GDP growth has slowed markedly in the 1H2017 despite relatively robust services growth which was dragged by weak performances from manufacturing and construction. Meanwhile, household spending grew weakly affected by a weak pound which hurt household budgets while business investment was flat.

• The latest GDP data showed that the UK economy registered the slowest growth amongst G7 economy in 2017 partly due to Brexit risks, which dampened business investment, and a weak pound, which hurt consumers more than it has helped exporters.

• Until the start of 2017, we found that the economy had performed better. However, the Brexit referendum and weak pound raised inflation in recent months, and with low wage growth has eroded household spending which in turn took a hit on its GDP.

Source: AmInvest Research - 25 Aug 2017