Inflationary impact on spending to hit Britain’s economic growth

THE British economy will grow at a sluggish pace this year, held back by lacklustre consumer spending crimped by an inflation rate that is well above the Bank of England’s target, a Reuters poll showed.

The poll of 27 economists, taken June 10-15, saw British gross domestic product (GDP) growing by 0.5% for all quarters until the third quarter of next year, following 0.4% in the current quarter.

The bulk of the government’s planned spending cuts, designed to rein in the budget deficit, are still in the pipeline. Inflation, which has stayed firmly above 4% this year, will serve as an added drag on consumer spending.