The UK’s economic slowdown continued in the final three of months of 2018 as growth fell to just 0.2 per cent.
The figure for October to December – fuelled by the steepest decline in car manufacturing for a decade – compares to 0.6 per cent in the previous three months.
The latest quarterly figures were hit by a particularly slow December, which saw growth fall by 0.4 per cent overall, including a 0.7 per cent plunge in manufacturing. Monthly GDP figures are generally more turbulent than quarterly data.
It means Britain’s economy grew by just 1.4 per cent in all of 2018, the worst year since 2009 and the aftermath of the financial crash.
The economy was boosted in the summer by sustained warm weather and the World Cup, the Office for National Statistics said.
The UK’s economic slowdown continued in the final three of months of 2018 as growth fell to just 0.2 per cent, according to new ONS figures out today (pictured)
The figure for October to December – fuelled by the steepest decline in car manufacturing (file image) for a decade – compares to 0.6 per cent in the previous three months
Sterling tumbled following the news, dropping 0.4 per cent versus the US dollar to 1.28. Against the euro, the pound was down 0.1 per cent at 1.14.
Chancellor Philip Hammond said: ‘The UK’s economy continues to grow and remains fundamentally strong.
‘Growth of 1.4 per cent in 2018 means the UK has grown every year for the past nine years and the OBR expects it to continue growing in every year of the forecast.
The UK is currently enjoying the longest unbroken quarterly growth streak of any G7 nation.’
Shadow chancellor John McDonnell: ‘The evidence is mounting that the combination of the Government’s shambolic handling of Brexit and nine years of austerity is causing real damage to our economy.
‘Business investment has been falling for months now, as uncertainty and the fear of No Deal cause immediate damage to confidence.
‘Six consecutive months of decline for the manufacturing sector hasn’t happened since 2009.
‘The Government must act now to take No Deal off the table and Philip Hammond must use his Spring Statement to end the disastrous austerity policy which has done so much to damage the economy.’
Car production was down 4.9 per cent in the period, marking the biggest decline since the first quarter of 2009.
Total production output slipped by 1.1 per cent, the largest decline since the end of 2012. This included a 0.9 per cent dip in manufacturing.
Construction was also lower, dropping 0.3 per cent in the fourth quarter. This follows two consecutive quarters of growth during the summer, when companies caught up with work delayed by adverse weather early in the year.
Chancellor Philip Hammond (pictured last week in Gloucestershire) said the figures showed the UK economy was ‘fundamentally strong’
Although services output was up, growth slowed to 0.4 per cent following a relatively strong performance during the summer.
The ONS said it reflected a slowdown across a number of industries, as Brexit-related concerns weighed on business-to-business spending at the end of 2018.
Rob Kent-Smith, head of GDP at the ONS, said: ‘GDP slowed in the last three months of the year with the manufacturing of cars and steel products seeing steep falls and construction also declining. However, services continued to grow with the health sector, management consultants and IT all doing well.
Economic growth slowed down in every three month period of 2018, the ONS’s rolling estimate of GDP (pictured) showed
‘Declines were seen across the economy in December, but single month data can be volatile meaning quarterly figures often give a better indication of the health of the economy.
‘The UK’s trade deficit widened slightly in the last three months of the year, while business investment again declined, now for the fourth quarter in a row.’
Compared with the same quarter in 2017, the UK economy is estimated to have grown by 1.3 per cent, the weakest in six years. It was last weaker in the second quarter of 2012.
On a month-to-month basis, GDP fell 0.4 per cent in December. This was the biggest monthly drop since March 2016.
Separately, the ONS data dump showed that Britain’s total trade deficit widened slightly in the last three months of the year by £900 million to £10.4 billion, due to a rise in goods imports including cars and chemicals.