UK GDP growth flat at the end of 2019

Daniel Fowler
February 13, 2020

Brexit was originally scheduled for March 2019, but was later delayed to October, and then again to January this year. The picture of the economy in late 2019 painted by the Office for National Statistics data on Tuesday was grim. It followed the first quarterly fall since 2012 in the second quarter.

The stagnation in the fourth quarter is compared with a 0.5 percent increase in the previous period.

The rebounded was partly driven by a recovery for the manufacturing and industrial sector. 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 vehicle plant shutdowns in November, when Britain faced the prospect of a no-deal Brexit.

He added: "It remains to be seen what impact the coronavirus outbreak will have on growth in the current quarter, but we believe the economy can continue to make modest progress this year".

Or at least not enough to lift economic growth.

"With Brexit uncertainty reaching fever pitch, the political goalposts were changing by the day and to read too much into output during the year could be erroneous. Markets will be far more focused on how the economy performs in the first quarter of this year".

Karim Yousfi, chief global strategist at Audacity Capital, said: "That's one more bullet dodged by the UK's fragile economy".

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"This government must implement the measures that small businesses need to thrive: a free trade agreement favorable to businesses with the European Union and nations beyond, an immigration system that works for businesses of all sizes and the end of the impact debilitating late payments, which nearly doubled to £ 20 billion previous year. By the lacklustre standards of the past few years, this is a passable GDP report".

Chris Towner, director at Chatham Financial, said: "Household spending, normally the reliable driver to growth in the United Kingdom, slumped to a four-year low".

"However, the company entered 2020 with more than a spring in their step".

"Uncertainly from the next stage of Brexit negotiations will increasingly play on the minds of business leaders".

Official figures released on Tuesday showed zero growth in the fourth quarter compared with the third, matching the median forecast in a Reuters poll of economists.

Shortly after the announcement, the pound was up 0.7% against the euro (GBPEUR=X) to €1.1852 and up 0.4% against the dollar (GBPUSD=X) to $1.2936. As at 1030 GMT, sterling was trading at €1.1848 and $1.2929.

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