Britain’s economy saw zero growth in the final quarter of last year as manufacturing shrank heading into the country’s general election that unlocked Brexit, official data showed on Tuesday, reports BSS/AFP. “There was no growth in the last quarter of 2019 as increases in the services and construction sectors were offset by another poor showing from manufacturing, particularly the motor industry,” said Rob Kent-Smith at the Office for National Statistics (ONS).
UK manufacturing contracted 0.8 percent in the October-December period, the ONS said. Britain finally departed the European Union on January 31 after Prime Minister Boris Johnson in December led his Conservative party to victory in national polls. “We’ve broken the deadlock and left the EU — now we need to seize this moment to level up and prepare our great nation for long-term success,” finance minister Sajid Javid said in a statement Tuesday following release of the growth data.
“In my budget, exactly one month from today, I’ll set out how we will move forward, with more ambition and new thinking, and empower our people and businesses so everyone has the opportunity to thrive,” Chancellor of the Exchequer Javid added. On the eve of Brexit however, the Bank of England slashed its UK economic growth forecasts for this year and next, as the country faces tough negotiations with the EU on striking a new trade deal.
The British economy would expand by only 0.8 percent this year, the BoE said last month, down sharply on its previous 1.2-percent forecast. In 2021, gross domestic product was expected to grow 1.4 percent, down on the central bank’s estimate of 1.7 percent given in November.
The ONS on Tuesday added that the UK economy grew by 1.4 percent last year after gross domestic product expanded 1.3 percent in 2018. GDP grew 0.5 percent in the third quarter of 2019.
“The UK economy faced headwinds from domestic political uncertainty and softening global growth last year,” said Ian Stewart, chief economist at Deloitte. “Under the circumstances a 1.4-percent growth rate wasn’t bad — and after all it was marginally better than 2018 and last year’s euro area growth rate.”
The pound was steady versus the euro and dollar following the latest GDP figures, while London’s benchmark FTSE 100 stocks index was up 0.75 percent. Pablo Shah, senior economist at the Centre for Economics and Business Research, said UK growth in the second half of last year had been reliant on exports.
“This exposes significant underlying weakness, and suggests that a slowdown in international trade or in the economies’ of major export partners could well pull the rug out from under the feet of the UK economy,” Shah added in a client note.