The CBI commented on the latest official UK GDP figures, which showed 0.4% growth in the first quarter of 2016.
Rain Newton-Smith, CBI Director of Economics, said:
“Growth has ticked down modestly at the start of 2016, in line with our expectations.
Weak manufacturing output highlights the pressures the sector continues to face despite some relief from the depreciation in sterling. Construction has also had a surprisingly weak first quarter, although the data are highly prone to revision.
Looking ahead, favourable tailwinds should deliver a reasonable rate of growth. Crucially, consumer spending – which accounts for around two thirds of the economy – is expected to hold up as low oil prices and decent household income growth reinforce spending.
However, there are risks that could knock growth off course. Global growth could slow further, hitting already weak exports and offsetting the boost from the falling pound. There is also a risk that concerns about debt positions in China and emerging markets could flare up again, leading to a return of financial market volatility.”