Published: Thu, February 13, 2020
Markets | By Otis Pena

GDP growth stagnant in Q4: ONS

GDP growth stagnant in Q4: ONS

Britain's economy saw zero growth in the final quarter of past year as manufacturing shrank heading into the country's general election that unlocked Brexit, official data showed onTuesday.

The figures, published by the ONS on Tuesday, revealed that December alone accounted for national GDP growth of 0.3%, which might be linked to the results of the general election that preceded Britain's final divorce with the European Union after three years of uncertainty.

The economic growth of the United Kingdom stabilized in the last three months of the financial year, as the country was affected by the political paralysis on Brexit, official figures revealed today.

However, the first estimate for December's GDP showed that it grew by 0.3%, compared to a 0.3% decline a month previously.

The manufacturing sector's output from October to December fell by 1.1 percent. Meanwhile, ongoing hiccups in global growth, including the fallout from coronavirus, could eat into the economy if global financial markets and trade slow.

Kent-Smith added: "The underlying trade deficit widened, as exports of services fell, partially offset by a fall in goods imports".

Senior economist at Capital Economics Ruth Gregory said the flat growth in the final three months of a year ago would "prove to be a low point".

Brexit was originally scheduled for March 2019, but then it was delayed until October and then again until January of this year.

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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.

"Some will see the December uptick as the first sign of the Boris Bounce, which could set the tone for 2020 as a whole".

The stagnation in the fourth quarter is compared with a 0.5 percent increase in the previous period. This was in line with expectations and an easing since strong growth in the middle of 2018. Many auto producers made a decision to close their factories for shorter periods at the beginning of the year.

During the same period, the construction industry grew by 0.5 percent.

Shadow chancellor John McDonnell said: "These are damning figures showing an economy punctured by 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".

"The Tories lack any vision or plan for the economy, and the upcoming Budget risks another decade of disappointment".

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