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Brexit squeeze is beginning to bite

May 1, 2017 12:52 PM
Originally published by South Lincolnshire Liberal Democrats

Official estimates released last week show GDP growth in January - March 2017 fell to 0.3%, down from 0.7% in the previous quarter. This is the slowest growth since the first quarter of 2016 (link)

If this performance is repeated through the rest of the year, annual growth will turn out to be 1.2%, significantly lower than the 2% growth the Bank of England is currently forecasting (link)

The biggest contributor to slower growth was the fall in retail trade, due in part to prices increasing. The distribution, hotels and restaurants sector saw negative growth of 0.5%.

Construction only grew at 0.2%, down from 1% growth in the previous quarter

GDP per head was estimated to have increased by just 0.1% over the quarter, which if repeated would mean an increase of just 0.4% over the year. This compares to inflation running at 2.3%

This comes as a new report by the Institute for Fiscal Studies has found average earnings will currently not reach pre-recession levels even by 2021-22, due to higher inflation caused by the fall in the pound since the EU referendum (link)

Liberal Democrat Shadow Chancellor Susan Kramer commented:

"This suggests the Brexit squeeze is beginning to bite, as prices rise and consumer spending plummets.

"The falling pound, lower wages and higher prices show how Theresa May's divisive hard Brexit is leaving people worse off.

"But the bad news will only get worse if the Conservatives are allowed to pursue their hard Brexit agenda and put the economy and jobs at risk.

"It's no surprise the Chancellor has chosen to hide away today instead of attempting to defend this government's reckless choice to leave the single market.

"If you want to change the direction of our country, keep Britain in the single market and prevent a disastrous hard Brexit, this is your chance."

Liberal Democrat Parliamentary Candidate for Grantham and Stamford - Anita DayAnita Day said:

"These figures are no surprise."

Theresa May's Hard Brexit is already starting to have a devastating impact on peoples' lives

"People in Grantham & Stamford tell me that they are really noticing their food shopping bills going up, and that they are starting to worry about their job security - and it hasn't even happened yet!

"So of course, they are going to start saving for a rainy day, rather than spending money they can't be certain of keeping!

"The people of this country must be given the chance to scrutinise the terms of whatever Brexit deal this Tory government negotiates. And they must be given the option to say 'No Thanks' if they decide they would prefer to stay with the deal we have today."