UK economic growth rate continues its pre-Brexit slowdown

Source: Xinhua| 2019-01-12 00:58:10|Editor: Mu Xuequan
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LONDON, Jan. 11 (Xinhua) -- The British economy continued its pre-Brexit slowdown in the GDP growth rate, with the rolling three-month rate continuing to decline from a peak seen in the summer, according to official figures released on Friday.

The rolling three-monthly growth rate for the period of September to November in 2018 was 0.3 percent, according to the Office of National Statistics (ONS).

"This is the weakest since last May. GDP got a boost over the summer from the hot weather and catch-up from the first quarter," Dr Howard Archer, chief economic adviser to EY ITEM Club, London-based economic forecasting group, told Xinhua in an interview on Friday afternoon.

"It does look like the economy has stepped down a gear in the last few months and that is no surprise, with Brexit uncertainty becoming ever more to the fore and that has led to some caution particularly among businesses over investment," Archer added.

However, the monthly GDP growth figures showed a different story, with growth in November over the October figures of 0.2 percent, beating the consensus expectations of economists for 0.1 percent growth.

November's monthly growth was driven largely by the dominant services sector, representing nearly 80 percent of the economy, with growth broadly based, and driven by retail, wholesale, and auto trading, boosted by strong pre-Christmas retail sales.

"The monthly figure for November was a little bit better than expected, and was up from 0.1 percent in October and a flat performance in September and that was largely the service sector growing by 0.3 percent month on month --but monthly GDP figures are volatile," said Archer.

Growth in the manufacturing sector continued to follow the downward trend seen in other European economies, such as Germany and France, with a monthly decline of 0.4 percent in industrial production, with declines across all sub-sectors.

"The main disappointment in the November figures was a further fall in the manufacturing sector, which has been a sector that has been struggling not just in the UK but in most countries -- that seems to be a global trend," Archer said.

Construction sector growth rebounded at 0.6 percent monthly growth, with the recovery from weakness in October driven by new work on private sector homes, but public sector construction continued to contract.

"It is hard to argue against the idea that the economy suffered a loss of momentum over the latter part of last year. This is a pattern which has been shared with most other major economies, but the UK's experience appears to have been exacerbated by the damage to sentiment from ongoing uncertainty around Brexit," said economist Andrew Goodwin of Oxford Economics.