United Kingdom economic growth in 2019 beats expectations

Andrew Cummings
February 13, 2020

The ONS on Tuesday added that the United Kingdom economy grew by 1.4 percent past year after gross domestic product expanded 1.3 percent in 2018. Quarterly data showed the economy stagnated at 0% in the final quarter of 2019.

Rob Kent-Smith, head of GDP at the ONS, 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".

The pound was steady versus the euro and dollar following the latest GDP figures, while London's benchmark FTSE 100 stocks index was up 0.75 percent.

"The extent of political and economic uncertainty towards the end of previous year has been laid bare with the economy spluttering to a halt", said Seamus Nevin, chief economist at Make UK, which represents the manufacturing sector. It was largely accounted for by a £ 2.2bn decline in imports of machinery and transport equipment, which could indicate that the order may have been brought forward to avoid the (delayed) Brexit October deadline.

During the October-December period, Britain was in the midst of one of its biggest political crises in decades that eventually led to a general election on December 12.

Manufacturing contracted for the third quarter in a row while the services sector also went through a brief period of sluggishness. Manufacturing output fell in the October-December period by the most since the third quarter of 2013, down 2.5 per cent from the same period a year earlier, reflecting auto plant shutdowns in November, when Britain faced the prospect of a no-deal Brexit. Many vehicle producers chose to close their factories for shorter periods at the beginning of the year.

ONS revised its growth figures for the third quarter of 2019 to 0.5% from an earlier estimate of 0.4%.

Chancellor Sajid Javid said: "We've broken the deadlock and left the European Union - now we need to seize this moment to level up and prepare our great nation for long-term success".

"More forward-looking data... are more optimistic, and while outright optimist would be misplaced, upgrades to previous quarters are well received".

Chancellor in the outgoing shadow of work, John McDonnell, said: & # 39; These are damning figures that show an economy going through a decade of decline.

"With production tumbling over 2019 at its worst rate since 2012, it is clear that the Tories' combination of cruel cuts and economic mismanagement has sent the economy into freefall".

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