Responding to today’s revelation that the economy is growing slightly slower than previously thought, with the Office for National Statistics revising down GDP growth from 0.5% top 0.4% in the third quarter of this year, James Sproule, Chief Economist at the Institute of Directors, said:
“While today’s GDP figures are a disappointment, they do not as yet undermine the longer term positive outlook for the economy in 2016. Consumer spending was always going to be the main driver of growth in 2016, but the danger remains that EU trade disappoints and household debt rises on the back of ultra-loose monetary policy.
“The Government has said it wants to create a ‘higher wage, lower tax, lower welfare’ economy. However, with public spending due to rise by 2.9% each year, and economic growth likely to come in below that figure, it will be difficult for the Chancellor to find room to cut the tax burden. Further bearing down on expenditure has to remain a priority in the New Year if the Government is to achieve its goal and put the economy on a sustainable long-term path.”