Business investment holds up after Brexit vote

Posted on November 25, 2016

The EU referendum result had little impact on business investment in the UK in the third quarter, according to official data, but the Office for National Statistics suggested most of those investment decisions would have been taken before the Brexit referendum in June.

Business investment increased by an estimated 0.9 per cent between the second and third quarters, to £44.2bn. The rate of growth was slightly slower than the 1 per cent seen in the previous quarter, but was significantly better than the 1 per cent decline predicted by economists.

Investment in the three months to September was 1.6 per cent lower than in the same period in 2015, but again the fall was better than the -2.5 per cent predicted.

The data tracks investment in non-financial assets such as dwellings, transport equipment, machinery, buildings and intellectual property products.

Darren Morgan, head of GDP at the Office for National Statistics said:

Investment by businesses held up well in the immediate aftermath of the EU referendum, though it’s likely most of those investment decisions were taken before polling day. That, coupled with growing consumer spending fuelled by rising household income, and a strong performance in the dominant service industries, kept the economy expanding broadly in line with its historic average.

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