Britain’s economy slows sharply, annual growth hits six-year low as hard Brexit looms
Tue Feb 12, 2019 01:33AM [Updated: Tue Feb 12, 2019 01:38AM ]
Facing the prospects of a hard Brexit, new data has revealed Britain’s economy slumped sharply in late 2018, with annual growth hitting a six-year low.
Data showed the British economy contracted by 0.4 percent in December alone, the biggest fall since March 2016, data provided by Reuters revealed on Monday.
The data also showed the UK’s annual growth in 2018 plummeted to its lowest point since 2012, falling at 1.4 percent, 0.4 points lower than 2017.
Investment was also reported to be in decline for four consecutive quarters, the longest period since the third quarter of 2009.
With business investment dropping 3.7 percent in the fourth quarter compared to the previous year, Britain is now facing its the biggest investment plunge since the first three months of 2010, when the country was emerging from recession.
British government and household spending, however, were reported to have had positive growth.
Following the report, the British pound reportedly suffered a third of a cent decrease bellow $1.2, before recovering.
The report comes as British Prime Minster Theresa May’s agreed deal with the European Union has so far failed to gain enough support in parliament, adding to uncertainty in the country’s economic future.
A probable no-deal Brexit on March 29 is speculated to inflict enormous damage to the country’s output, investment and jobs.
“Brexit uncertainty, a slowing global economy and the persistent financial squeeze on consumers and businesses (are) increasingly having a suffocating effect on economic activity,” believes British Chambers of Commerce economist Suren Thir.
Last week, the Bank of England cut its forecast growth for this year by 0.5 percent, reaching 1.2 percent, the weakest since the 2009 recession.
Japanese car-maker Nissan also announced its decision to scrap production plans for a new model in the UK due to Brexit uncertainties.
Airbus CEO Tom Enders has also warned that the UK’s position “at the forefront of global aviation for more than a century” was clearly threatened by a no-deal Brexit, saying that the company will cease wing assembly operations in the country if it leaves the EU without a deal.
“In a global economy, the UK no longer has the capability to go it alone,” he said.
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