British economy at weakest in 6 years as Brexit worries weigh, Latest Business News - The New Paper

British economy at weakest in 6 years as Brexit worries weigh

This article is more than 12 months old

LONDON Britain's economy slowed sharply late last year, pushing full-year growth to its weakest in six years as Brexit worries hammered investment by companies and the global economic slowdown weighed on trade, official data showed yesterday.

The pace of economic growth fell to a quarterly rate of 0.2 per cent between October and December from 0.6 per cent in the previous quarter, in line with forecasts in a Reuters poll, while output in December alone dropped by the most since 2016.

"The UK economy lost its summer exuberance in the final months of 2018, and there are signs of further chill winds ahead," economist Tej Parikh at the Institute of Directors said.

Sterling fell by a third of a cent to below US$1.29 (S$1.75).

For last year as a whole, growth dropped to its lowest since 2012 at 1.4 per cent, down from 1.8 per cent in 2017.

"(Gross domestic product) slowed in the last three months of the year with the manufacturing of cars and steel products seeing steep falls and construction also declining," the British Office for National Statistics statistician Rob Kent-Smith said.

In December alone, the economy contracted by 0.4 per cent, the biggest fall since March 2016. Exports suffered from global weakness and consumers and businesses grew increasingly concerned about the lack of a plan for when Britain is due to leave the European Union on March 29.

Last week, the Bank of England chopped its forecast for growth this year by 0.5 percentage points to 1.2 per cent, which would be the weakest year since the 2009 recession. - REUTERS