UK GDP growth flat in Q4 amid Brexit uncertainty

Source: Xinhua| 2020-02-11 22:49:16|Editor: yan
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LONDON, Feb. 11 (Xinhua) -- Britain's gross domestic product (GDP) growth was flat in the final quarter last year, marking a difficult period for the country's economy largely thanks to Brexit uncertainty, according to data released by the Office for National Statistics (ONS) Tuesday.

Britain's service sector grew by merely 0.1 percent in the period (from October to December) and construction output grew 0.5 percent while production output fell 0.8 percent on a quarterly basis, said the ONS, adding that the fourth quarter witnessed an 1.1 percent increase year-on-year.

In terms of the whole-year economy performance, the first snapshot of GDP growth in 2019 was 1.4 percent, reflecting a "slight pickup" from an 1.3 percent rise in 2018, although it was one of the slowest rates since the financial crisis in 2008 and 2009, said the ONS.

"There was no growth in the last quarter of 2019 as increases in the services and construction sectors were offset by another poor showing from manufacturing, particularly the motor industry," said Rob Kent-Smith, head of GDP in the ONS.

As Prime Minister Boris Johnson led the Conservative Party to win large majority in the parliament, monthly GDP increased by 0.3 percent in December, driven by growth in services.

However, analysts doubt whether this post-election rebound will have lasting momentum in the coming months.

"Despite breaking the Brexit deadlock in Westminster, a faltering global economy and a challenging domestic business environment could limit the UK's growth prospects -- particularly if the lack of clarity over post-transition trading arrangements persists," said Suren Thiru, head of economics at the British Chambers of Commerce.

Echoing Thiru, Seamus Nevin, chief economist of Make UK, a manufacturers' organisation, said on Twitter: "Business confidence in industry remains fragile with concerns about our future trade rules meaning that the taps of investment are unlikely to be turned on anytime soon."

"This is the main cause for concern so all eyes will be on the nature and quality of any trade deals secured over the next 11 months," added Nevin.

Following Britain's long-delayed departure from the European Union (EU) on Jan. 31, post-Brexit trade talks are expected to start in March and downward risks remain for both sides should they fail to reach a trade deal within the transition period that ends in December this year.

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