UK growth hits 6-month low, man­u­fac­tur­ing slides

Wor­ries about the global econ­omy have been mount­ing while a Brexit deal re­mains un­cer­tain

Viet Nam News - - WORLD BUSI­NESS -

LON­DON — Bri­tain’s econ­omy cooled in the three months to Novem­ber, ex­pand­ing at its weak­est pace in six months as fac­to­ries suf­fered from tough global trade con­di­tions ahead of Brexit, of­fi­cial data showed yes­ter­day.

Gross do­mes­tic prod­uct in the three months to Novem­ber was 0.3 per cent higher than in the pre­vi­ous three-month pe­riod, down from growth of 0.4 per cent in the three months to Oc­to­ber and match­ing the con­sen­sus of a Reuters poll of econ­o­mists.

Man­u­fac­tur­ers suf­fered their long­est pe­riod of monthly falls in out­put since the fi­nan­cial cri­sis, hurt by weaker over­seas de­mand, the Of­fice for Na­tional Statis­tics said.

Wor­ries about the global econ­omy have been mount­ing due to con­cerns about a trade war be­tween the US and China. Fig­ures from Ger­many and France ear­lier this week sim­i­larly showed fall­ing in­dus­trial out­put

Bri­tain’s eco­nomic growth in the three months to Novem­ber was driven mostly by the dom­i­nant ser­vices sec­tor, as well as the con­struc­tion in­dus­try.

The fig­ures fit with busi­ness and con­sumer sur­veys that sug­gest the econ­omy is slow­ing sharply af­ter ro­bust growth of 0.6 per cent in the third quar­ter of the year, re­flect­ing grow­ing un­cer- tainty ahead of Bri­tain’s planned de­par­ture from the EU, as well as global jit­ters.

Bri­tain is due to leave the EU on March 29 and whether busi­nesses will still be able to trade with­out dis­rup­tion to cross-bor­der sup­ply chains re­mains un­clear.

The fu­ture of the deal which Prime Min­is­ter Theresa May has agreed in prin­ci­ple with the EU hangs in the bal­ance ahead of a par­lia­men­tary vote which will take place on Tues­day.

May is widely ex­pected to lose and this would leave open the prospect of Bri­tain leav­ing the EU with­out any tran­si­tional ar­range­ments to smooth the eco­nomic shock.

Calls for a sec­ond ref­er­en­dum – which May has re­jected – are grow­ing.

Yes­ter­day’s fig­ures showed that com­pared with a year ear­lier, the econ­omy stood 1.4 per cent larger. In Novem­ber alone, it ex­panded 0.2 per cent, com­pared with fore­casts for a rise of 0.1 per cent.

The data are broadly in line with the Bank of Eng­land’s view that the econ­omy is likely to have grown around 0.2 per cent over the fourth quar­ter of 2018.

Bri­tain’s econ­omy slowed af­ter the June 2016 Brexit vote, its growth rate slip­ping from top spot among the Group of Seven group of rich na­tions to mid-ta­ble or lower.

Con­sumers in par­tic­u­lar were squeezed by the jump in in­fla­tion which fol­lowed the pound’s tum­ble af­ter the ref­er­en­dum, es­pe­cially as wages have failed to keep up.

That said, an un­usu­ally warm sum­mer in mid-2018 en­cour­aged many to splash out on drinks and pub and restau­rant vis­its.

But re­tail sales data sug­gests con­sumers reined in spend­ing over Christ­mas.

Ear­lier this week closely watched pur­chas­ing man­agers’ sur­veys pointed to fourth-quar­ter growth of around 0.1 per­cent in Bri­tain, ac­cord­ing to data firm IHS Markit which com­piles the sur­veys.

Yes­ter­day’s data showed that Bri­tain’s ser­vices sec­tor grew by 0.3 per cent over the three months to Novem­ber, while in­dus­trial out­put dropped by 0.8 per cent, the big­gest de­cline since May 2017.

Look­ing at Novem­ber alone, in­dus­trial out­put dropped 1.5 per cent on the year - the big­gest fall since Au­gust 2013.

Sep­a­rate fig­ures showed Bri­tain’s goods trade deficit widened un­ex­pect­edly in Novem­ber to 12 bil­lion pounds from 11.9 bil­lion pounds, wors­ened by the high­est oil im­ports since Sep­tem­ber 2014. — REUTERS

Newspapers in English

Newspapers from Viet Nam

© PressReader. All rights reserved.