Responding to the latest official GDP figures, showing that the economy shrunk in Q2 by 0.2%, Tej Parikh, Chief Economist at the Institute of Directors, said:
“Contraction in the second quarter is a rude awakening after the growth in the first three months of the year, and confirmation of the concerns businesses have been expressing about the economy.
“Companies have been running down stockpiles that were built up before the original March deadline for leaving the EU, and have kept production at tentative levels. Many firms have had to keep investment and recruitment decisions on ice, as the prospect of a disorderly Brexit becomes increasingly real.
“With the nature of the UK’s exit from the EU looking likely to be determined at the eleventh hour, the economy is facing a bumpy ride going into Q3. Another round of stockpiling is complicated by preparations for Christmas and by firms’ previous experience of spending money to no avail.
“While consumers have helped keep the economy afloat, it is increasingly worrying that underlying growth is largely absent. Whatever happens on October 31, the government needs to give business leaders a significant shot in the arm to return investment and productivity growth to the country after a prolonged period of uncertainty.”