James HesterThe UK has become one of the slowest growing members of the G7 club while Canada has turned into the strongest.
Canada, as the latest G7 nation to report first quarter growth figures, lept into the lead with an expansion of 0.9% over the period.
The data means the UK is now confirmed as being a laggard among the world´s seven largest economies. With growth of just 0.2% for the first quarter, the UK is jointly the worst performer over the period along with Italy.
Canadian growth spurt
Rising oil production and consumer spending saw Canadian growth surge during the first quarter. The 0.9% growth for the period marks an acceleration from the 0.7% rate seen in the prior quarter. It also represents Canada´s strongest quarterly growth in almost three years.
Household spending picked up over the quarter, with a notable increase in vehicle purchases. There was also an upturn in business spending on machinery and equipment. The latter is a sign that stabilisation in oil prices has encouraged Canadian oil producers to increase production.
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UK woes
Just a week away from a general election, headlines about the UK´s relegation in the G7 growth table are not good news for the Conservative government.
The 0.2% growth rate registered by the UK economy over the first three months of 2017 represents a sharp slowdown from the 0.7% growth registered in the prior quarter.
Brexit impact
The sharply slower growth may well be a sign that the UK economy is finally suffering the impact of last June´s shock Brexit vote.
Higher inflation on the back of sterling´s depreciation following the vote to leave the EU appears to have taken a toll on consumer spending. There are justifiable worries that real spending power is being eroded as higher inflation outpaces wage growth.
