Official estimates suggest strong UK economic growth

In recent days, new official estimates of monthly Gross Domestic Product (GDP) growth have been published by the Office for National Statistics (ONS), indicating that the UK economy is beginning to warm up this summer after a slow winter period.

The data, which was published earlier this week, suggests that the economy hit a “virtual standstill” back in March, as cold weather conditions caused by the so-called ‘beast from the east’ negatively impacted growth, The Telegraph reports.

However, GDP recovered by 0.2 per cent in April, followed by 0.3 per cent in May, as the warmer weather and the royal wedding helped to boost high street footfall.

During these months, the services sector grew by an impressive 0.4 per cent, while activity among UK law firms and computer programmers also noticeably increased.

Meanwhile, there was a pick-up in consumer spending at restaurants and hotels, while Britons also rushed to splash out on holidays and leisure activities, the ONS’ data reveals.

“Services, in particular, grew robustly in May with retailers enjoying a double boost from the warm weather and the royal wedding. Construction also saw a return to growth after a weak couple of months,” said Rob Kent-Smith, of the ONS.

“Retailing, computer programming and legal services all performed strongly in the three months to May while housebuilding and manufacturing both contracted,” he added.

Following the publication of the new data, economists have been keen to point out that service sector growth is on track to run at a six-quarter high.

Commentators have also noted that, in light of the good news, the Bank of England (BoE) is now very likely to increase interest rates from 0.5 per cent to 0.75 per cent next month.

 

Government proposes new tax measures to encourage green van driving

The Government has launched a new clean air consultation designed to encourage van drivers to go green, which could include additional taxes on ‘dirty’ vehicles.

The new tax measures, which aim to improve air quality in towns and cities, build on previous changes which significantly increased vehicle excise duty for vehicles which exceeded the clean emissions threshold.

But Exchequer Secretary Robert Jenrick said today that the changes have not done enough to persuade drivers to trade in their vehicles for greener ones.

The latest figures show that less than one in every 200 vans (0.4 per cent) bought in 2016/17 fell into the “ultra-low emission” category.

The vehicle excise duty on all vans is currently charged at a flat rate of £250, but the Government will look at incentivising drivers to switch to cleaner models.

The consultation will look at changing this duty to encourage drivers to choose cleaner models when purchasing a new van. It will explore creating a graduated first-year rate for vans based on environmental impact, as is already in place for cars. This would mean green van drivers would pay less tax in the first year as a result of the change.

Mr Jenrick, said: “We want to be the first government to leave the environment in a better state that we found it. One of the ways we can do this is by using the tax system to help drivers afford greener choices.

“We want to help ‘white van man’ go green. We appreciate that buying a new van is a major investment for small businessmen and women and want to help make environmentally friendly choices more affordable.”

Environment Secretary Michael Gove added: “Businesses have a crucial role in this. That’s why today we are setting out plans to make low emission vans more affordable and asking businesses how we can help them break down the barriers to the use of lower emission machinery.”

To view the consultation in full, please click here.