UK economy slowest since 2012 as Brexit woes weigh

london — Britain’s economy slowed sharply in late 2018, pushing full-year growth to its weakest in six years as Brexit worries hammered investment by companies and the global economic slowdown weighed on trade, official data showed on Monday.

The pace of economic growth fell to a quarterly rate of 0.2 per cent between October and December from 0.6 per cent in the previous quarter, in line with forecasts in a Reuters poll, while output in December alone dropped by the most since 2016.

“The UK economy lost its summer exuberance in the final months of 2018, and there are signs of further chill winds ahead,” economist Tej Parikh at the Institute of Directors said.

Sterling fell by a third of a cent to below $1.29.

For 2018 as a whole, growth dropped to its lowest since 2012 at 1.4 per cent, down from 1.8 per cent in 2017.

Exports suffered from global weakness and consumers and businesses grew increasingly concerned about the lack of a plan for when Britain is due to leave the European Union on March 29.

Prime Minister Theresa May has so far failed to win parliament’s backing for the plan she agreed with Brussels to avoid reimposing checks on goods exported from Britain. Major economies around the world also slowed in late 2018, due in part to trade tensions between the United

1.4% Growth recorded by UK economy in 2018

States and China, while Brexit is an added challenge for Britain.

Last week the Bank of England chopped its forecast for growth this year by 0.5 percentage points to 1.2 per cent, which would be the weakest year since the 2009 recession.

Monday’s data showed net trade lopped more than 0.1 percentage points from the fourth-quarter growth rate. Falling business investment did similar damage.

“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,” Office for National Statistics statistician Rob Kent-Smith said.

In December alone, the economy contracted by 0.4 per cent, the biggest fall since March 2016.

Finance minister Philip Hammond said the data showed the economy remained “fundamentally strong” and that public-sector forecasters did not foresee a recession.