UK has lowest economic growth of G7 countries – the implications for East Devon

Owl says: According to our Local Plan, the Greater Exeter Strategic Plan AND the plans of Local Enterprise Partnership, development in East Devon, Exeter, Devon and Somerset (economic and housing) was based on an expectation of constant, uninterrupted high growth. Now what?

“The consumer-driven momentum that has kept the British economy afloat since the Brexit vote is declining rapidly, with new data showing households in the grip of the most protracted squeeze on living standards since the economic crisis of the mid-1970s.

Against a backdrop of rising prices and stagnant wage growth, incomes adjusted for inflation have now fallen for three successive quarters, the first time this has occurred since the International Monetary Fund had to bail Britain out in 1976.

At the same time, the amount being set aside as savings has now slipped to just 1.7% of disposable income – the lowest level on record, and a fraction of the near-10% average for the last 50 years. Just a year ago, it was more than three times the current rate.

The new data from the Office for National Statistics shows that in the first three months of 2017, the mounting financial pressure on consumers brought the UK’s strong performance following last summer’s Brexit vote to an abrupt halt.

On Thursday, separate figures showed an unexpected jump in consumer credit. Households borrowed an extra £1.7bn in May – £300m more than had been expected – on credit cards, personal loans and car finance. A survey of consumer confidence also showed a steep decline.

Despite saving less and borrowing more, consumers still reined in their spending, contributing to economic growth confirmed today at just 0.2% – the lowest of any of the major G7 industrial nations.

Spending in the shops, new car sales and property transactions have all showed signs of weakness, and the Bank of England has expressed concern about rising levels of consumer debt. …”