GDP grows by 0.3% as economy slows down in the wake of post-referendum business boom

THE ECONOMY grew by 0.3 per cent in the second quarter of the year, official figures revealed today.

The rate of GDP growth has risen since the start of 2017, but is still lagging behind the growth seen in the immediate aftermath of Brexit.

Chancellor Philip Hammond hailed the figures as proof that the country had been expanding non-stop for nearly five years.

Both manufacturing and construction shrank between April and June, the Office for National Statistics said today.

But the economy was propped up by services, which grew by 0.5 per cent as shops boomed.

The GDP figures were an improvement on those from the first quarter, when the economy grew by 0.2 per cent, but lower than the 0.7 per cent seen at the end of last year.

Mr Hammond said today: "Our economy has grown continuously for four and a half years, delivering record levels of employment. We can be proud of that - but we are not complacent.

"We need to focus on restoring productivity growth to deliver higher wages and living standards for people across the country.

"That is why we are committed to investing in infrastructure, technology and skills to deliver the best possible base for strong future growth."

Shadow Chancellor John McDonnell responded: "Today's GDP figures reveal weak growth under a weak government, and expose the last seven years of Tory economic failure.

"Growth for the first half of 2017 is below expectations, and it follows continued data showing working families are being squeezed with wages not keeping up with prices.

Darren Morgan of the ONS added: "The economy has experienced a notable slowdown in the first half of this year.

"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."

Thriving businesses include hotels, restaurants and cinemas as consumers showed no sign of scaling back their leisure activities.

Economists have predicted that Britain's economy will grow faster in months to come following figures which show retailers are continuing to strengthen.

Ben Brettell of Hargreaves Lansdown said: "Last week saw news that retail sales rose ahead of expectations, indicating the consumer may still have some petrol in the tank - though the Bank of England has expressed caution over rising levels of personal debt.

"Meanwhile, inflation began to recede, which if it continues in the coming months could end the squeeze on real incomes."

The UK economy defied doom-mongering forecasts after the Brexit referendum, with claims we could slip into recession proven wrong.

But experts have warned that if negotiations with the EU go badly, we could face a hard landing over coming years.