UK economic growth rises after biggest manufacturing push since 1980s

Andrew Cummings
May 13, 2019

United Kingdom gross domestic product (GDP) is estimated to have grown by 0.5% in Quarter 1 (Jan to Mar) 2019, having slowed to 0.2% growth in the previous quarter.

The downward trajectory through the first quarter suggests that consumers became increasingly jittery about the prospects for the United Kingdom economy as the Tory government's plan to push through a Brexit deal foundered.

Britain's gross domestic product (GDP) increased by 0.5 percent in the first quarter of 2019, up from 0.2 percent in the previous quarter, according to preliminary figures released on Friday by the Office for National Statistics (ONS).

Howard Archer, chief economic adviser to the EY ITEM Club, said: This was a deceptively strong start to economic activity in 2019 as there was a major boost to first-quarter GDP growth from stockpiling as businesses and, very possibly to a limited extent, consumers looked to protect their supplies in case a disruptive no-deal Brexit occurred at the end of March.

"It's not surprising to see households and businesses protecting themselves against a potentially disastrous Tory no-deal Brexit", Shadow Chancellor of the Exchequer John McDonnell said.

Tej Parikh, senior economist at the Institute of Directors, said: "The relatively strong growth figures for Q1 may just be a flash in the pan". Brexit has now been delayed until October 31 unless there is an early agreement.

The ONS noted that many manufacturers had delivered orders early, indicating a rush of activity as companies cleared out the order books in advance of the March 29 Brexit deadline.

Finance minister Philip Hammond said the data showed the economy remained robust.

However, some sectors - such as auto dealers, wholesalers and warehouses reported relatively little stockpiling.

The 0.5 per cent first quarter growth rate was...

In comparison to the same period previous year, GDP grew by 1.8 per cent rather up from 1.4 per cent. Due to the sheer volume of imports of unspecified goods, Britain's trade deficit grew to 3.4 percent of nominal GDP, the widest in more than 50 years.

Britain's economy has slowed since June 2016's vote to leave the European Union, with annual growth rates dropping from more than 2 per cent before the referendum to expand by 1.4 per cent a year ago.

Meanwhile, manufacturing increased by 1.5% in January, but by only 0.9% in March.

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