UK economy growth halved in final quarter of 2018 as Brexit anxiety heightens

The UK economy grew by just 0.2% in the final quarter of 2018, down from 0.6% in the previous quarter, exceeding economic forecasts that predicted GDP growth would remain unchanged in the final three months of the year, according to data from the Office of National Statistics (ONS).

‘Brexit uncertainty clearly hitting UK GDP and investment,’ Independent Business Economist and Bank of England Monetary Policy Committee member Andrew Sentance tweeted.

‘GDP growth in 2018 1.4pc, weakest since the financial crisis. Business investment has contracted in past 4 quarters and now nearly 4pc down on a year ago,’ he added. ‘UK already counting the cost and we have not left the EU yet!’

British production suffers sharp slowdown amid Brexit uncertainty

UK production fell by 0.5% in December 2018, with the manufacturing industry contracting by 0.7%, representing the sixth month in a row that the sector has seen growth decline – which last happened between September 2008 and February 2009, the ONS said.

‘GDP slowed in the last three months of the year with the manufacturing of cars and steel products seeing steep falls and construction also declining,’ Head of GDP at the ONS Rob Kent-Smith said. ‘However, services continued to grow with the health sector, management consultants and IT all doing well.’

‘The UK’s trade deficit widened slightly in the last three months of the year, while business investment again declined, now for the fourth quarter in a row,’ he added.

UK household incomes down £1500 since Brexit referendum

According to the thinktank Resolution, British household are, on average, £1500 worse off since the 2016 Brexit referendum, with UK economic growth slowing considerably since the vote and the pound’s decline helping to drive up inflation.

‘The UK’s stark under-performance on income growth since 2016 – which has tailed off more than other advanced economies – has left UK households taking a £1500 hit to their living standards,’ Research Director at the Resolution Foundation James Smith said.

‘As we approach ‘Brexit day’ on 29 March, politicians in all parties needs to recognise 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,’ he added.