Official figures show the UK economy has stalled in the final quarter of 2019, as Brexit uncertainty dragged down businesses.
The Office for National Statistics (ONS) released the disappointing quarterly figures today – read the full report here.
The figures showed that – as expected – the UK economy failed to grow in the last three months in 2019, resulting in a flat reading of 0% in GDP growth. Consumer spending was poor considering the crucial Christmas period; but it was manufacturing in particular that performed poorly, cancelling out some small growth in the construction and services sectors.
Markets had hoped that the election at the end of December would be enough to boost growth in the final weeks of last year, and bump the numbers back up to growth. The Conservative win however clearly came too late, and has done little to improve business confidence anyway. Further negotiations between the UK and the EU, will be closely watched by businesses, who will be hoping for things to stay as close to the current system as possible – a hope that is fast disappearing.
On Monday, minister Michael Gove warned businesses that this year will mark the end of frictionless trading between the UK and EU. Gove said that border checks on goods coming into the UK will be “inevitable” at the end of the transition period. These extra checks will slow down logistics operations, and businesses warn they will face higher costs as a result.
The one ray of hope in the GDP report was that December did see growth of 0.3%, a small sign of the hoped-for ‘Boris bounce’ as a result of the election. This was enough to counteract the -0.3% figure for November, and hit the overall 0% for the quarter.
If this is the extent of the ‘Boris bounce’ however, then it will likely not be enough to significantly help the UK economy. The global economy at large is under pressure from both the ongoing US-China trade war, and the recent Coronavirus outbreak. With new UK cases being confirmed, there is even a direct threat to the UK economy from the virus.
2020 looks to be another year of uncertainty for the UK economy. With both domestic and international threats keeping stagnation – and perhaps even recession – in the headlines.