UK economy 'holding up well' despite signs of slowing consumer spending

Macroeconomic conditions in the UK remain firm overall despite some signs of slowing consumption and a moderating housing market, according to new research.

In a note to clients, ratings agency Moody's said UK economic activity remains "resilient" after the June 2016 Brexit referendum on the country's membership of the European Union, which saw the public vote 52:48 in favour of leaving the bloc.

"Investment sentiment has returned to pre-referendum levels in the first two months of the year supported by a brightening outlook for global growth, but it remains below five-year averages," the agency added.

Moody's said consumption-related indicators lost some momentum in the first quarter.

"Rising price pressures, softer house-price growth and a dip in survey indicators for household credit availability are emerging headwinds."

However, it adds that a "pick-up in industrial production, particularly in the capital goods segment, has supported UK economic activity in early 2017".

While surveys point to rising UK export orders in manufacturing, supported by a pick-up in global growth, the trend is less visible in the services sector.

Additionally, housing-market indicators are broadly in line with five-year averages, but have started to trend weaker in the first three months of 2017.

"Expectations point to a further moderation in house price growth," Moody's conclude.