UK economy grew 0.5% in aftermath of Brexit vote, down from 0.7%

John McDonnell said that the slowdown in growth in the last quarter from the previous quarter showed a "slow erosion" of the British economy.

The shadow chancellor said: "Manufacturing fell back in this quarter and that's an indication of the slowdown that's happened in our economy overall.

"We've always said that we never expected an immediate crisis. What we were worried about was a slow erosion of our economy if we don't get certainty and security for the future."

In a speech on Thursday, Mr McDonnell said that the Government had to be "clear about its objectives and its approach to prevent uncertainty".

There is "little evidence" that Britain's vote to leave the EU had a "pronounced impact" on the UK economy, according to the Office for National Statistics' chief economist.

Commenting on the latest figures, which show the economy grew by 0.5% in the three months after the Brexit vote, Joe Grice said: "Today's data provide the most comprehensive picture so far of the post-referendum UK economy.

"While quarterly growth has fallen slightly, the economy has continued to expand at a rate broadly similar to that seen since 2015 and there is little evidence of a pronounced effect in the immediate aftermath of the vote.

"A strong performance in the dominant services industries continued to offset further falls in construction, while manufacturing continued to be broadly flat.

“It is important to remember this is the first estimate, though it does reflect information already gathered from more than 37,000 UK firms.”

• How each sector of economy performed since Brexit vote

The UK economy grew by 0.5% in the three months since June's EU referendum, showing the public is so far "keeping calm and carrying on shopping", ITV News Economics Editor Noreena Hertz said.

However she added that it would be a different story when inflation hits next year.

The pound has dropped more than 20% in value against the US dollar since the Brexit vote, making Britain's products cheaper abroad.

But the fall in the pound's value is having an adverse effect on the price of imported food, goods and materials used by manufacturers.

Today's GDP figures for the last quarter were "better than anticipated" said ITV News Business Producer, Joanna Partridge.

The 0.5% growth in Q3 slowed from the previous quarter which recorded a 0.7% growth, but the post-EU referendum slowdown wasn't as bad as some experts had predicted.

The UK economy has bucked expectations of a substantial slowdown in the three months after the EU referendum thanks to a "strong performance" from the services sector.

The economy grew by 0.5% in the third quarter, compared a 0.7% expansion in the three months to June, official figures show.

The services industries increased by 0.8%, with the main boost coming from transport, storage and communication, which grew at its fastest pace since the fourth quarter of 2009, rising 2.2% over the period in contrast to 0.6% in the second quarter.

There was also a boost from film and TV production, while the release of Ghostbusters, Jason Bourne, The BFG and Star Trek Beyond helped bolster box-office receipts in July.

In contrast to the service sector, construction fell by 1.4%, manufacturing decreased by 1.0%, agriculture dropped by 0.7% and production contracted by 0.4%.

The Chancellor Philip Hammond has said he is "pleased" with official figures showing the UK economy grew by 0.5% in the three months since the EU referendum.

The figures from the Office for National Statistics revealed a slow-down in economic growth during the third quarter, following an expansion of 0.7% in the three months to June.

Mr Hammond added that the figures show the economy is "still resilient" and "well-placed" to deal with the challenges of Brexit.

In a statement, he said: “The fundamentals of the UK economy are strong, and today’s data show that the economy is resilient. We are moving into a period of negotiations with the EU and we are determined to get the very best deal for households and businesses. The economy will need to adjust to a new relationship with the EU, but we are well-placed to deal with the challenges and take advantage of opportunities ahead.

"I am confident that our strong links with the rest of the world will stand us in good stead as we deliver an economy that works for everyone.”

UK economic growth slowed following the Brexit vote in June's EU referendum, official figures show.

The Office for National Statistics (ONS) said GDP grew by 0.5% in the third quarter from July to September, compared to growth of 0.7% in the three months to June.

The ONS said there was little evidence of a "pronounced" impact on the economy in the immediate aftermath of the referendum.

It added that a "strong performance" in the services sector had help deliver a higher-than-expected GDP figure for the three months to September. Economists had been predicting a steeper fall, with growth of just 0.3%.

In August the Bank of England warned third quarter growth would almost flat-line at around 0.1%, before upgrading its growth forecast in September to between 0.2% and 0.3%.