Responding to the latest official GDP figures, showing that
the economy shrunk in Q2 by 0.2%, Tej Parikh, Chief Economist at
the Institute of Directors, said:
“Contraction in the second quarter is a rude awakening after the
growth in the first three months of the year, and confirmation of
the concerns businesses have been expressing about the economy.
“Companies have been running down stockpiles that were built up
before the original March deadline for leaving the EU, and have
kept production at tentative levels. Many firms have had to keep
investment and recruitment decisions on ice, as the prospect of a
disorderly Brexit becomes increasingly real.
“With the nature of the UK’s exit from the EU looking likely to
be determined at the eleventh hour, the economy is facing a bumpy
ride going into Q3. Another round of stockpiling is complicated
by preparations for Christmas and by firms’ previous experience
of spending money to no avail.
“While consumers have helped keep the economy afloat, it is
increasingly worrying that underlying growth is largely absent.
Whatever happens on October 31, the government needs to give
business leaders a significant shot in the arm to return
investment and productivity growth to the country after a
prolonged period of uncertainty.”
