Economic growth halves as confidence ebbs away amid Brexit uncertainty

Britain’s economic growth has halved since the summer against a backdrop of Brexit chaos and the threat of global trade wars, official figures have shown.

GDP moved ahead 0.2 per cent in November, bringing the quarterly rolling average growth rate down from 0.4 per cent to 0.3 per cent. 

It had been as high as 0.7 per cent in the three months to August when output was boosted by the royal wedding, the World Cup and hot summer weather. However, data from the Office for National Statistics showed that confidence ebbed away during the autumn as Theresa May struggled to win support from her Cabinet for her plan to quit the European Union. City experts said there was unlikely to be any pick-up for the economy while there was still so much uncertainty.

Mike Jakeman, senior economist at consultancy PwC said: “The clear loss of momentum in the economy since the summer is as expected, given the ongoing lack of clarity on Brexit. For as long as this remains unclear, businesses will continue to defer major investment plans and households will reconsider making big-ticket purchases.” 

Pablo Shah, economist at forecasters CEBR said: “The economy has now entered what is likely to be a prolonged spell of weak growth. CEBR forecasts that the UK economy will expand by 1.1 per cent in 2019, which would make it the weakest year since the 2009 recession, as economic uncertainty continues to cripple sentiment among firms and households alike.” 

During November the economy was supported by the dominant services sector, which gained 0.3 per cent. But industrial production slipped 0.4 per cent, dragged down by a 0.3 per cent fall in factory output.

Manufacturing has fallen for five consecutive months for the first time since the banking crisis a decade ago, with the car and pharmaceuticals sectors both performing poorly. Industrial output fell 0.8 per cent in the latest three months.

The figures came after the British Retail Consortium declared Christmas the worst for the high street in a decade and a number of well-known retail names revealed falls in sales or only meagre growth.

However, there was more encouraging news today from two retailers in contrasting sectors of the market.

Piccadilly store and grocer to the Queen Fortnum & Mason reported record Christmas trading, with sales up 12 per cent in the five-week period before December 31.

Chief executive Ewan Venters said: “We have always believed that quality products, exceptional service and an extraordinary retail environment is what makes us stand out. In this day and age, it is more important than ever to be unique, and our exceptional Christmas results demonstrate that.”

Meanwhile discount supermarket chain Lidl said it had seen a 33 per cent increase in sales of its premium product range over Christmas and an eight per cent increase in sales across all its branches in the six weeks to December 30.

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