There was virtually no growth in the economy of the United Kingdom in the fourth quarter of the 2019 primarily because of a contraction during the quarter, the third straight quarter of contraction, while there has also been a slowdown in the services sector since the time of the last national elections.
According to the data from the UK’s Office for National Statistics (ONS), the fourth quarter has also been particularly bad for the car industry in the country.
Data from the ONS showed that there was a growth of just 1.4 per cent for the entire of 2019 which was slightly higher than the growth for the previous year at 1.3 per cent.
However, according to indications from recent surveys, there is some growth back in the UK economy so far in the current year.
The flat growth seen at the end of the year would “prove to be a low point”, suggested Ruth Gregory, senior UK economist at Capital Economics. “The pick-up in the surveys of activity and sentiment suggest the first quarter will be much better. The GDP figures were not quite as bad as we had feared in quarter four. The stagnation in GDP beat our forecast of a 0.1% quarter-on-quarter fall,” she added.
ONS said that the growth rate in the UK economy in December of 2019 was just 0.3 per cent which reversed the contraction see in the economy in the previous month.
“It’s likely that political uncertainty and unwinding stockpiles caused the economy to flag at the end of last year,” said Tej Parikh, chief economist at the Institute of Directors. “However, firms entered 2020 with more of a spring in their step. Confidence has shot up, while hiring plans and investment intentions have also risen a notch, but the post-election bounce may tail off,” he said.
“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, the ONS’s head of GDP.
During the last three months of the last year, there was just a 0.1 per cent growth in the services sector of the country which typically accounts for more than three fourths of the total value of the UK economy. In the same period, there was a 0.5 per cent growth in the construction industry in the economy.
However there was a contraction of 1.1 per cent in the manufacturing sector during the quarter in the UK.
The growth rate for the third quarter of 2019 was revised to 0.5 per cent by the ONS from the previous forecast of a growth of 0.4 per cent.
(Adapted from BBC.com)