UK economy set to shrug off Brexit in latest GDP figures…For now

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The first indications of how the U.K. economy is performing in the aftermath of the Brexit vote will be known this Thursday, with the release of quarterly gross domestic product (GDP) figures.

Analysts told CNBC they forecast a 0.4 percent growth in the third quarter of this year - an "upside surprise" following the decision last June to leave the European Union. Prior to the vote, many market observers were pointing to economic contractions if voters opted to leave the EU.

However, the medium- and long-term outlook for the U.K.'s gross domestic product remains fragile, especially since talks of a "hard Brexit" emerged at the conservative party meeting earlier this month.

"The medium-term is just as bad, despite the upside quarter three picture," Oliver Jones, economist at Fathom consultancy told CNBC on Wednesday.

Jones said that private service sector would be the main driver of the third-quarter GDP figure, and activity by these companies are set to go up by 0.8 percent in the same period.

The Bank of England raised last month its growth expectations for the third quarter to 0.3 percent from 0.1 percent. It cited that near-term economic activity had been stronger-than-expected.

British Prime Minister Theresa May
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"It is early to come to many conclusions," Alastair Winter, chief economist at Daniel Stewart told CNBC over the phone. "What I am looking at is quarter four, quarter one of next year," he added.

Thursday's figures are expected to back up arguments that the immediate panic following the Brexit vote has dissipated. Analysts start therefore looking at any possible reductions in the employment rate, investment spending and consumer behavior to calculate the impact of Brexit.

"I'm more interested in the second estimate in a couple of weeks' time. It will show how business and consumers reacted to the vote," Kallum Pickering, senior U.K. economist at Berenberg told CNBC.

"Brexit is mainly a risk to long-term growth," he added.

On Wednesday, the British Bankers Association (BBA) said that mortgage approvals fell 15 percent last month, compared to the same time last year.

"Mortgage approvals picked up slightly this month but the housing market continues to shows signs of underlying weakness. Both house purchase and remortgaging approvals are down on the corresponding figures for 2015," Rebecca Harding, chief economist at BBA said in a press release.

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