Uncertainty? What uncertainty? UK economy picks up in May as Niesr estimates faster GDP growth

Jake Cordell
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Manufacturing has, for once, supported UK economic growth
Manufacturing has, for once, supported UK economic growth (Source: Getty)

The UK economy is steering clear of a pre-referendum slowdown, a fresh estimate of economic growth, published this afternoon, has revealed.

According to the National Institute of Social and Economic Research (Niesr), the economy grew by 0.5 per cent in the three months to the end of May, killing off the idea that Brexit uncertainty has paralysed the UK economy.

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The estimate was pushed up by the surprisingly strong performance of the UK's manufacturing sector in April, with production output climbing by two per cent during the month in figures released by the Office for National Statistics (ONS) this morning.

An estimate of 0.5 per cent growth between March and May is an increase on the 0.3 per cent Neisr predicted the UK economy grew by between February and April and the 0.4 per cent official growth rate in the first quarter of the year.

James Warren, a research fellow at Niesr said: "A rebound of production sector output has supported reasonable GDP growth in the three months to May.

"Our estimates imply that growth so far in 2016 has remained relatively subdued ... there remain specific uncertainties around the near-term outlook for the UK economy, most notably the outcome of the impending referendum on the UK's membership of the EU."

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Before today's figures, economists had chalked up growth of around 0.2 - 0.3 per cent in the second quarter of the year and pointed to three-year lows on the purchasing managers' indexes (PMI), currency volatility and weak trade figures as evidence.

However, despite speculation and reactions on the financial and currency markets, today's figures show the UK economy appears to be ticking along at a modest, if unspectacular, rate of growth.

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