The growth of the British economy was the slowest in a quarter in the last six years in the fourth quarter of 2018 as had been expected by the markets and analysts primarily because of slowing down of the investments over Brexit deal concerns according to officials figures from the government agency.
The rate of growth in the gross domestic product for the economy for the final quarter of 2018 was a mere 0.2 per cent compared to growth rate of 0.6 per cent a quarter earlier. The growth rate was in line with most of the expectations of most analysts including the average forecast of economists gathered in a Reuters poll. But the rate was slightly lower than the forecast that was made last week by the Bank of England – UK’s central banker.
“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,” said Rob Kent-Smith, statistician for the government agency Office of the National Statistics.
In terms of the growth rate for the entire year of 2018, it clocked slowest since 2012 coming at a dismal 1.4 per cent which was lower than the 1.7 per cent achieved by the British economy a year earlier. There was a drop in exports because of a general weakness in the global economy and because of growing concerns among consumers and businesses alike about the lack of any appropriate plans for the Brexit even as the UK is slated for a divorce from the European Union in just about 50 days on March 29.
The BoE last week brought down its forecast for the entire of 2019 by 0.5 per cent and put it at 1.2 per cent which would make it the slowest rate of growth for the British economy since the recessionary year of 2009.
Growth across major economies were hurt because of concerns about a global slowdown in the last few months of 2018, induced partly because of the ongoing escalating trade war between the United States and China, along with Brexit which has been a lingering concerns for quite some time now for the UK.
The data also showed a drop of over 0.1 per cent in net trade from the fourth quarter growth rate. There was a similar fall in business investment.
In the month of December itself, here was a contraction of 0.4 per cent in the economy which is the largest drop since 2016.
The British government under Prime Minister Theresa May has so far not been able to gain the confidence of the parliament after a dismal loss in a vote for a deal that May had intiially agreed to with Brussels that would avoid reimposing checks on goods exported from Britain.
There was a year on year drop of 3.7 per cent in business investment in the fourth quarter which was the steepest drop since the first quarter of 2010 – a time when the British economy was reviving form a recession.
(Adapted from EuroNews.com)