The UK economy grew at its fastest pace in six months in July, a strong performance beyond expectations that is likely to allay fears of a possible pre-Brexit recession. The economy recorded growth across the board, with the services sector enjoying its best. It will expand 0.4 per cent in the third quarter even if output is unchanged in August and September.

That will avoid a second straight quarter of contraction.

However, some evidence does exist of the UK economy losing some momentum in recent months because of the political crisis over Brexit and the escalating US-China trade conflict, according to global newswires.

In a recent report, KPMG warned that leaving the European Union without a deal could trigger a recession lasting four quarters, with output contracting by 1.5 per cent next year. The Resolution Foundation said the next recession could be ‘unnecessarily painful’ because monetary and fiscal policy are ill-equipped to combat it.

The UK gross domestic product expanded by 0.3 per cent in July, beating forecasts for a 0.1 per cent rise, and was unchanged over the latest three months. The economy will reportedly avoid a recession unless output drops by more than 0.8 per cent over August and September. (DS)

Fibre2Fashion News Desk – India

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