Britain's economy expanded at a 0.3% pace in the second quarter, the Office for National Statistics said Wednesday, as activity remained subdued over the first half of the year owing to uncertainty surrounding the country's decision to leave the European Union.
Quarterly growth was driven by gains in the services sector, particularly retail sales, the ONS said, although the annual pace of growth slowed to 1.7% from 2%, the ONS said, putting the Bank of England's full-year target of 1.9% at risk amid what the ONS called a "notable" decline in activity. Britain's economy, the second-largest in Europe, grew only 0.2% in the first three months of the year.
"The economy has experienced a notable slowdown in the first half of this year," the ONS said. "While services such as retail, and film production and distribution showed some improvement in the second quarter, a weaker performance from construction and manufacturing pulled down overall growth."
The pound slipped around 0.12% against the U.S. dollar following the release to change hands at around 1.3010.
Andrew Sentance, a former Bank of England rate setter now working with PwC, said the first half growth rate was the weakest in at least five years.
The Bank of England has noted that consumer confidence remains "resilient" but nonetheless has expressed concern for the squeeze in household spending, which is being hit by faster inflation and flat wage growth.
