Economy growth overshadowed by ‘uncertainty of Brexit process’

British Chancellor of the Exchequer Philip Hammond’s claim that the country can reap economic benefits from Prime Minister Theresa May’s Brexit proposals suffered a serious blow after newly-published official figures revealed that the United Kingdom has just endured its worst year of GDP growth since 2012.

Monday’s figures from the Office of National Statistics, known as the ONS, revealed that in 2018, the economy grew by just 1.4 percent, and in the three months to December it had managed a mere 0.2 percent growth.

The ONS said much of the slowdown was due to reductions in factory output and reduced car production, both of which are worldwide, rather than specifically British, issues.

Hammond now faces a struggle to meet the targets he set in the autumn budget, the so-called Brexit dividend, which saw the government committed to cutting the deficit, ending austerity and providing an addition 20 billion pounds ($25.6 billion) for the National Health Service.

He attempted to put a positive spin on the figures, by placing them in the context of a general global economic slowdown, and calling them “a solid performance”, but admitted the ongoing Brexit uncertainty was not helpful.

“There is no doubt that our economy is being overshadowed by the uncertainty created by the Brexit process and the sooner we can resolve that the better, the quicker we can get back to more robust growth in the future,” he said.

Conservative MP Nicky Morgan, chair of the Treasury Select Committee, said it would take more than just avoiding a no-deal Brexit for there to be any real economic boost.

“The OBR (Office for Budget Responsibility) already assumes an orderly Brexit, so there won’t be a ‘deal dividend’ beyond the forecast just by avoiding no-deal,” she said. “Business confidence may improve with increased certainty, but it’s not credible to describe this as a dividend.”

May’s Brexit terms, agreed with the leaders of the remaining 27 EU member states last year, were overwhelmingly rejected by members of Parliament in a recent vote, and she is currently trying to come up with revised terms to win their support, despite the EU having made it clear it is not interested in further negotiations.

As things stand, the country is on course to leave the EU at the end of March with no agreed exit terms, a so-called hard Brexit, which many people have warned will bring significant economic and social cost.

On Tuesday, May was due to update MPs on her attempts to revise her Brexit proposals ahead of a parliamentary vote scheduled for Thursday, but there are widespread suggestions that the vote could be delayed.