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Britain’s Economy Is Almost Flatlining

Faster inflation is curbing consumer spending a year after the Brexit vote.
Data: U.K. Office for National Statistics, Bloomberg survey of economists; graphic by Bloomberg Businessweek

While the British economy performed better than many expected in the wake of last year’s Brexit vote, data on Wednesday are set to show U.K. growth hardly recovered in the second quarter. Economists surveyed by Bloomberg are forecasting an uptick to just 0.3 percent, from 0.2 percent three months ago. Accelerating inflation has started to crimp consumer spending, the main driver of momentum.

The Bank of England announces its next policy decision on Aug. 3, and lackluster growth may weaken the case for a rate increase, even with inflation above target.

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