UK GDP growth flat in January due to weak services and production

Source: Xinhua| 2020-03-11 22:41:24|Editor: yan
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LONDON, March 11 (Xinhua) -- Britain's gross domestic product (GDP) growth was flat in January 2020 compared with the previous month, with rise in services offset by falls in production and construction, according to data released by the Office for National Statistics (ONS) Wednesday.

Meanwhile, Britain's GDP growth was also flat in the three months to January 2020, compared with the preceding three months, driven mainly by weakening services and dropping production.

Data showed that the services sector saw no growth in the three months to January 2020, mainly dragged by the wholesale, retail and motor trade sector, and the information and communication sector, which decreased by 0.7 percent and 1.0 percent respectively.

The production sector declined by 1.0 percent in the three months to January 2020, driven by widespread falls in the manufacturing industry.

Meanwhile, output in the construction sector increased by 1.4 percent in the three months to January 2020, thanks to the private new housing, non-housing repair and maintenance, and private commercial.

Rob Kent-Smith, head of GDP in the ONS, said that "The economy continued to show no growth overall in the latest three months. Growth in construction, driven by housebuilding, offset yet another decline in manufacturing, particularly the drinks, cars and machinery industries."

"The dominant services sector also showed no growth in the latest three months with falls in retail and telecoms balanced by strength in rentals, employment and education," added Smith.

"UK GDP flatlined in January, showing no signs of the rebound in activity signalled by all the business surveys," said Samuel Tombs, chief UK economist at Pantheon Macroeconomics, adding that "MPC (Monetary Policy Committee of the Bank of England) probably would have cut bank rate this month anyway, had the virus never spread to Britain."

Earlier Wednesday, the Bank of England cut its main interest rate from 0.75 percent to 0.25 percent Wednesday as part of a package of measures to cushion the impact of COVID-19.

"The Bank of England's role is to help UK businesses and households manage through an economic shock that could prove sharp and large, but should be temporary," the bank said, adding that "a comprehensive and timely package of measures" will help prevent a temporary disruption from causing longer-lasting economic harm.