The latest growth estimate for the UK, released by the National Institute of Economic and Social Research (NIESR), indicates that the economy is likely to grow at a rate of 0.4 per cent.
This represents a reduction from the previous growth forecast of 0.8 per cent, meaning that economic performance in the three months to September are unlikely to meet the same level as the three months to June, during which time the economy grew by 0.7 per cent.
However, despite predictions indicating that various worldwide economies will actually shrink, the NIESR stated that the UK economy is still expected to grow by 2.5 per cent this year.
The news comes despite a smaller-than-expected growth in the UK’s manufacturing sector, as well as a slowing down in the construction industry.
Regarding the UK economy, the NIESR was positive, even stating that a small increase in unemployment was to be expected.
In a statement, it said: “The unemployment rate increased slightly in the three months to May 2015. This is only temporary.
“The increase will be reversed in the coming quarters as the unemployment rate gradually declines to its long-run level of 5-5.5 per cent.”
Britain’s weak productivity remains to be the biggest challenge for the economy, because employees are not producing enough during their working hours.
In July, the Office for Budget Responsibility took the decision to downgrade its estimate for GDP growth from 2.5 per cent to 2.4 per cent, due to a slower start to the year than had initially been predicted.