UK economy struggles ahead of ‘Brexit’: data
Pound sinks below $1.26 after May delays Brexit deal vote
LONDON, Dec 10, (AFP): Britain’s Brexit-facing economy experienced sluggish growth in October as the car sector stalled, official data showed Monday.
Gross domestic product grew by just 0.1 percent in October from September, the Office for National Statistics (ONS) said in a statement.
That represented a marginal rebound from zero growth in both August and September.
“GDP growth slowed going into the autumn after a strong summer, with a softening in services sector growth mainly due to a fall in car sales,” said Rob Kent-Smith, head of national accounts at the ONS.
“This was offset by a strong showing from IT and accountancy.”
Analysts widely expect the economy to cool further ahead of Britain’s departure from the European Union in March.
Meanwhile, sterling fell under $1.26 on Monday to hit a 20-month low after Prime Minister Theresa May delayed a critical vote on her Brexit deal one day before it was due. Just after 1600 GMT, sterling sank by more than 1.5 percent to strike $1.2507 -- which was the lowest level since April 2017.
That compared with $1.2640 before May made her official announcement in the House of Commons.
At the same time, the euro was propelled to 90.87 pence, reaching a peak last seen at the end of August.
“During Prime Minister May’s speech to the House, sterling fell through $1.26 to trade (at) levels not seen in 20 months, bringing the 2017 lows at $1.19 into focus,” ETX Capital analyst Michael Baker told AFP.
He added: “With the UK due to leave the European Union on March 29, the prospect of no deal and further instability is weighing on the pound.”
May said she had listened to the concerns of critics and in the face of a likely rejection.
The premier explained she would seek “assurances” from other European leaders ahead of an EU summit later this week in a bid to try to win back support for her maligned plan in Britain. “If we went ahead and held the vote tomorrow the deal would be rejected by a significant margin,” May told parliament.