The National Institute of Economic Social Research (NIESR) said UK economy is on course to contract by -0.1% in Q2. However, initial outlook for Q3 is for growth of 0.2%. Thus, UK would likely avoid a technical recession, two consecutive quarters of contraction.
Janine Boshoff, Economist in the Macroeconomic Modelling and Forecasting team, said “Our latest estimate implies that the economy will narrowly avoid a technical recession in the middle quarters of this year. That said, the latest ONS data and recent surveys suggest that the economy has lost considerable momentum since the first quarter. This reflects the impact of Brexit-related uncertainty and slower growth in the global economy outside of the United States. The near-term outlook for the UK economy continues to depend on the outcome of the Brexit negotiations.”.
UK Hammond: Chequers plan offer in-the-middle, down the center solution for Brexit
UK Chancellor of the Exchequer Philip Hammond talked about Brexit negotiation in a BBC TV interview. He said “the mood is undoubtedly that people want to do a deal with the UK. People want to minimize the disruption of the UK’s departure from the European Union, they want to continue having a relationship with us and smooth trading partnership in the future.”
But he also admitted “Clearly there has been a hit to the economy through the uncertainty the Brexit process has caused. Many businesses are sitting on their hands frankly waiting to see what the outcome of this negotiation is before confirming their investment plans.”
He also defended Prime Minister Theresa May’s Chequers plan and said “What Chequers does is offer an in-the-middle solution, down the center, taking the best from both models, and proposing a way forward which delivers on the mandate of the British people in the referendum but also protects British jobs and British businesses,”