There's now clear proof the threat of no deal Brexit is hurting the UK economy – Business Insider

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There's now clear proof the threat of no deal Brexit is hurting the UK economy - Business Insider

united kingdom umbrella union jackReuters

  • UK economic growth slowed sharply at the end of 2018, official data show.
  • The British economy grew just 0.2% in the final quarter of 2018, as businesses continued to stifle investment against a background of Brexit-related uncertainty.
  • On an annual basis, the ONS said that the economy grew 1.4% in 2018, the lowest growth since 2012.

Economic growth in the UK slowed to just 0.2% in the final quarter of 2018, according to the Office for National Statistics, as businesses continued to stifle investment against a background of Brexit-related uncertainty, and the potential for a no deal exit from the European Union.

2018’s final GDP figure is the second lowest reading for the UK economy since it contracted in the fourth quarter of 2012.

The final quarter of 2018’s number was only beaten by the 0.1% growth witnessed in the first quarter of last year. Growth in the third quarter of 2018 was 0.6%.

On an annual basis, the ONS said that the economy grew 1.4% in 2018, the lowest growth since 2012.

“GDP slowed in the last three months of the year with the manufacturing of cars and steel products seeing steep falls and construction also declining,” the ONS’ head of GDP Rob Kent-Smith said in a statement.

“However, services continued to grow with the health sector, management consultants and IT all doing well.”

While the quarterly picture is troublingly weak, monthly data for December are even worse, with growth actually shrinking 0.4% in the final month of the year. That may seem like a worrying data point, but Kent-Smith was keen to play down its significance.

“Declines were seen across the economy in December, but single month data can be volatile meaning quarterly figures often give a better indication of the health of the economy,” he said.

Read more: ‘Don’t listen to the Brexiteers’ madness,’ says Airbus CEO who is threatening to pull out of the UK entirely over Brexit

The ONS’ data on UK economic growth at the end of last year comes less than a week after the Bank of England forecast that the economy will grow at its slowest rate since the financial crisis this year.

The central bank lowered its economic growth forecast for the UK in 2019 to just 1.2% last week, which would mark the slowest annual growth since 2009.

“The fog of Brexit is causing short term volatility in economic data, and more fundamentally is creating a series of tensions in the economy,” Bank of England Governor Mark Carney said at a press conference.

“Although many companies are stepping up their contingency planning, the economy as a whole is still not yet prepared for a no deal, no transition exit.”

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