Brexit un­cer­tainty leads to drag on UK econ­omy

Western Daily Press (Saturday) - - Uk & World News - RAVENDER SEMBHY Press As­so­ci­a­tion City Ed­i­tor

BRI­TAIN’S econ­omy con­tin­ued to cool in the three months to Novem­ber as a “steep de­cline” in man­u­fac­tur­ing ac­tiv­ity dragged on growth amid in­creas­ing Brexit un­cer­tainty.

Over the three months to Novem­ber, GDP rose 0.3 per cent com­pared with the pre­vi­ous quar­ter, ac­cord­ing to the Of­fice for Na­tional Statis­tics (ONS).

Growth of 0.4 per cent was recorded in the three months to Oc­to­ber.

The ONS said the largest down­ward drag came from a fall in mo­tor ve­hi­cle pro­duc­tion of 4.3 per cent.

In Novem­ber alone, fac­tory out­put fell 0.4 per cent, the fifth con­sec­u­tive month of de­cline, and the man­u­fac­tur­ing sec­tor’s long­est los­ing streak since the fi­nan­cial cri­sis in 2008.

The man­u­fac­tur­ing sec­tor has been hit by fac­tory shut­downs – such as at Jaguar Land Rover – and weaker con­sumer de­mand for cars and de­clin­ing diesel sales.

Head of na­tional ac­counts at the ONS, Rob Kent-Smith, said: “Growth in the UK econ­omy con­tin­ued to slow in the three months to Novem­ber 2018 after per­form­ing more strongly through the mid­dle of the year. Ac­coun­tancy and house-build­ing again grew but a num­ber of other ar­eas were slug­gish.

“Man­u­fac­tur­ing saw a steep de­cline, with car pro­duc­tion and the of­ten-er­ratic phar­ma­ceu­ti­cal in­dus­try both per­form­ing poorly.”

On a rolling three-month ba­sis, the man­u­fac­tur­ing sec­tor con­tracted by 0.8 per cent and month on month it fell 0.3 per cent.

In­dus­trial pro­duc­tion as a whole con­tracted 0.8 per cent in the three months to Novem­ber amid a global slow­down, as the US and China ham­mer out a new trade deal.

Month-on-month, the UK econ­omy grew by 0.2 per cent in Novem- ber, com­pared with growth of 0.1 per cent in Oc­to­ber.

The lack­lus­tre fig­ures come as Prime Min­is­ter Theresa May again at­tempts to gain par­lia­men­tary ap­proval for her Brexit deal.

Mike Jakeman, se­nior econ­o­mist at PwC, said: “The lat­est monthly GDP data adds to ex­ist­ing im­pres­sions that the econ­omy is slow­ing as un­cer­tainty over Brexit in­ten­si­fies.

“The clear loss of mo­men­tum in the UK econ­omy since the sum­mer is as ex­pected, given the on­go­ing lack of clar­ity on Brexit.

“For as long as this re­mains un­clear, busi­nesses will con­tinue to de­fer ma­jor in­vest­ment plans and house­holds will re­con­sider mak­ing big-ticket pur­chases.”

Month on month, con­struc­tion grew 0.6 per cent in Novem­ber. Man­u­fac­tur­ing con­tracted 0.3 per cent, while ser­vices ac­tiv­ity rose 0.3 per cent.

Sep­a­rately, the ONS data dump also showed that Bri­tain’s to­tal trade deficit nar­rowed by £200 mil­lion to £7.9 bil­lion in the three months to Novem­ber 2018 as both goods and ser­vices ex­ports in­creased £100 mil­lion more than their re­spec­tive im­ports.

The loss of mo­men­tum

in the econ­omy since the sum­mer is ex­pected, given the on­go­ing lack of clar­ity on Brexit MIKE JAKEMAN, PWC

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