U.K. GDP Slows in Fourth Quarter as Brexit Uncertainty Weighs
The British economy saw growth decelerate more than expected in the fourth quarter with the annualized reading dropping to its weakest level in six years, as uncertainty over the U.K.’s pending departure from the European Union weighed.
In a report, the Office for National Statistics (ONS) said gross domestic product expanded by a seasonally adjusted 0.2% in the October to December period.
That was below forecasts of a 0.3% rise and compared to growth of 0.6% in the third quarter.
Year-over-year, UK economic growth expanded 1.3% in the fourth quarter, its weakest growth since the second quarter of 2012 and also below estimates for growth of 1.4%. The British economy grew 1.6% in the third quarter.
“Two and a half years since the UK voted to leave the European Union, the country’s post-Brexit position remains far from clear,” James Smith, research director at Resolution Foundation, said. “As we approach ‘Brexit day’ on 29 March, politicians in all parties needs to recognize how much is at stake for family living standards and that how the country goes forward, not just where it is heading, matters for household incomes in the here and now.”
“The economy is now 12% larger than before the financial crisis with output up 19% since the 2009 trough,” James Knightley, chief international economist at ING, said. “Unfortunately, Brexit uncertainty and global protectionism fears suggest 2019 will be a much tougher year.”
In a separate report, industrial production unexpectedly fell 0.5% in December from the prior month, while manufacturing production dropped 0.7%.
Analysts had expected gains of 0.1% and 0.2%, respectively.