UK financial progress eased to zero.2% within the remaining quarter of 2018 because the clock ticked all the way down to Brexit, official figures present.
The preliminary determine from the Workplace for Nationwide Statistics (ONS) represented a big slowdown on the zero.6% achieved between July and September however was in keeping with economists’ forecasts.
It meant that, topic to revisions, the financial system grew by 1.four% over the 12 months – its weakest efficiency since 2014.
The pound fell under $1.29 following the information launch – a fall of virtually half a cent – as traders digested the harm from Brexit uncertainty and the broader headwinds within the international financial system linked to the US commerce warfare with China.
Of the best concern can be a contraction for December alone of zero.four%.
The ONS stated steep declines within the manufacturing of metal, new vehicles and within the building sector drove the fourth quarter efficiency, although family spending proved resilient – up zero.four% on the earlier quarter and 1.9% on a yr in the past regardless of a tricky Christmas for the excessive avenue.
Rob Kent-Smith, its head of GDP (gross home product), stated: “GDP slowed within the final three months of the yr with the manufacturing of vehicles and metal merchandise seeing steep falls and building additionally declining.
“Nevertheless, companies continued to develop with the well being sector, administration consultants and IT all doing effectively.
“Declines have been seen throughout the financial system in December, however single month knowledge will be risky which means quarterly figures typically give a greater indication of the well being of the financial system.
“The UK’s commerce deficit widened barely within the final three months of the yr, whereas enterprise funding once more declined, now for the fourth quarter in a row.”
The ONS measured automobile manufacturing four.9% down between October and December – its greatest decline for the reason that first quarter of 2009 because the trade battles Brexit uncertainty, weaker demand domestically and overseas and a crackdown on diesel.
Total manufacturing output was 1.1% decrease whereas building dipped by zero.three%.
Tej Parikh, senior economist on the Institute of Administrators, stated: “The UK financial system misplaced its summer time exuberance within the remaining months of 2018, and there are indicators of additional chill winds forward.
“The continuing uncertainty round what occurs after 29 March is the prime suspect behind sapped financial exercise.
“There’s presently a drag on progress as some companies are compelled to carry again on main investments and have interaction in cautionary stockpiling.
“The primary half of 2019 will convey additional challenges for the UK financial system. China’s slowdown and weak progress in Europe are more likely to chunk at British exporters.
“On the identical time, whereas customers have proven resilience to this point, many have gotten more and more cautious with their wallets.
“The clock is ticking but when a Brexit deal will be agreed, issues ought to begin to look sunnier as pent-up demand is launched and companies start investing once more.”
Neil Wilson, chief market analyst at Markets.com, stated of the figures: “We should warning towards blaming all on Brexit – international cooling is having the largest dampening impact on all main economies at current – though we should notice that enterprise funding is collapsing (-1.four%, the fourth straight quarter of decline), and this must be attributed to the present uncertainty.”