Growth falters under Brexit’s long shadow
BRITAIN’S economy ground to a halt in the fourth quarter, leaving annual growth at its lowest level since the 2009 global recession, according to official data due on Tuesday.
The Office for National Statistics is expected to say that its initial estimate of UK gross domestic product (GDP) growth for the last quarter of 2019 is zero.the flat quarter will leave full year GDP at 1.3 per cent, down 0.1 points on 2018’s growth rate. It is the lowest growth seen since 2009, when the economy experienced a 4.3 per cent contraction.
Economists attribute the anticipated weak GDP figures to the shadow of Brexit, which dented corporate and consumer companies, due to the uncertainty surrounding Britain’s future relationship with the European Union.
Martin Beck, lead UK economist at Oxford Economics, said: “GDP for the quarter is going to be flat mostly because the autumn was very weak. Short of a spectacular rise in activity in December, it will be very weak. Its a legacy of the preelection
CONFIDENCE among small to medium-sized enterprise (SME) owners is at its highest level for 18 months, according to Hitachi Capital Business Finance.
It said that 39 per cent of SMES are forecasting growth this quarter, compared to the 34 to 36 per cent range during the preceding six quarters.
Small business owners in London were the most confident, with 47 per cent predicting growth, followed by the North-west with 45 per cent and 44 per cent in the North-east.
nerves, there was a hiatus in activity as businesses were waiting to see what would happen.”
IHS Markit chief business economist Chris Williamson said: “There’s a lot of Brexit uncertainty in the fourth quarter, but we have more clarity this year.”
However since Prime Minister Boris
Johnson’s decisive General Election victory in December, markets and economists are more optimistic about Britain’s future prospects.
Investec chief economist Philip Shaw said: “What is important is the ongoing signs of a ‘Boris bounce’ and whether it is real and strengthening. We’re relatively optimistic that the bounce will be maintained throughout the year.”
Even though economists are more optimistic about Britain’s prospects due to some of the uncertainty being cleared, IHS Markit chief business economist Chris Williamson warned that the deadly coronavirus will affect the global economy.
“With the coronavirus we may see people start to downgrade their forecasts aggressively because we are increasingly seeing companies warning of the impact it is having on supply chains,” he explained.
“As things stand, it is likely that it will be the biggest threat to global and UK growth, if it intensifies. Companies are warning that it could be a marked hit to business.”
Business has shut down in China due to the outbreak of the coronavirus.