UK Q2 GDP second estimate likely to confirm first estimate of 0.6 percent growth

UK’s business investment is expected to have been hit by Brexit uncertainty. According to a Societe Generale research report, the second estimate of UK’s second quarter GDP is likely to come in the same as the first estimate of 0.6 percent growth in sequential terms. The breakdown of expenditure is likely to be more of an interest.

Consumer demand is expected to be seen remaining resilient; however, business investment is likely to have been hit. Anecdotal and survey evidence both have showed that the firms in UK were keeping their plans of capital investment on ice ahead of the referendum, noted Societe Generale.

At the turn of the year, business investment in the UK declined. The weakness seen in business investment is expected to have continued in the second quarter of 2016. Furthermore, net exports are also expected to have been a slight drag on the UK’s economic growth in the second quarter.