UK Economy Flat-lines, Hit by Brexit and Global Slowdown, as Election Nears
Britain’s economy grew at its slowest annual pace in nearly seven years in October, offering a weak backdrop to Thursday’s national election in which both leading parties are promising to boost growth.
The approach of a Brexit deadline and the global economic slowdown hit Britain’s factories and construction industry in the month, official data showed on Tuesday.
Gross domestic product rose by 0.7% compared with Otober 2018, the weakest growth since March 2012 when Britain was still trying to shake off the effects of the global financial crisis.
In the three months to October, growth flatlined compared with the previous three-month period, the Office for National Statistics said, as expected by economists in a Reuters poll.
The economy also showed no change in monthly terms, the ONS said, weaker than a median forecast of 0.1% growth in the poll.
Britain’s economy avoided falling into a pre-Brexit recession over the summer when it grew by 0.3% in the three months to September.
But it has shown signs of slowing since then as an Oct. 31 deadline for leaving the EU - which has since been extended - approached.
Further uncertainty about the outcome of the Dec. 12 national election is likely to have caused more caution among businesses since then.
Prime Minister Boris Johnson has urged voters to back him and his Brexit deal, saying it would “unleash a great tide of investment” into Britain when it clears a currently deadlocked parliament.
But worries about a chaotic exit from the EU are unlikely to vanish even if Johnson wins the election because he has ruled out asking Brussels to extend a transition period if a deal for future trade ties has not been agreed by the end of 2020.
The opposition Labour Party has said it will hold a fresh Brexit referendum after negotiating a new Brexit deal, potentially offsetting some of the concerns among many businesses about other Labour policies including higher corporate taxes and nationalisation of some key industries.
The ONS said industrial output fell by 0.7% in the three months to October while Britain’s large services sector grew by 0.2%, its weakest increase since June.
Neha writes articles on sectors including medicine, food, materials, and science & technology. A qualified statistician, she has the ability to observe and analyze the trends in global markets and write compelling articles that help CXOs in decision making. She is a bookworm and loves to read fiction, lifestyle, science and technology. Neha comes with 6 years of experience in content writing and editing that involves blog writing, preparation of study materials and OERs.