The UK’s economy shrank for the first time since 2012 in the second quarter according to fiscal data made available by Britain’s Office for National Statistics.
With Boris Johnson’s British government committed to exit the EU on October 31, regardless of whether a deal passes from the House of Commons or not, allowing the UK to exit with a transition period so as to avoid trade disruption, the outlook for the last quarter of 2019 seems uncertain.
Taking into consideration the slowdown of the global economy, due to a trade dispute between the United States and China, the UK’s year-on-year economic growth is down to 1.2% from 1.8% in the first quarter of 2019.
The Bank of England last week predicted that growth will only stage a limited pick-up to a quarterly rate of 0.3% during the current quarter, concluding 2019 at 1.3%. However, the trend seems to be much greater., with the UK’s central bank also warinnig of a 1-in-3 chance that output in annual terms will contract in the coming quarters.
UK’s economy shrank in the three months to June, with the British GDP dropping by 0.2pc on the quarter, marking a sharp reversal from the strong growth of 0.5pc in the first three months of the year after a boost to the market by stockpiling of goods and materials. June’s manufacturing data was also unexpectedly poor and output for the quarter contracted at the fastest rate since early 2009, when Britain was mired in recession.
Since the UK’s vote to exit the EU in June 2016’s annual growth rates have dropped from more than 2% before the referendum to expand by 1.4% in Friday’s data showed business investment contracted 0.5% in the second quarter of the year versus economists’ expectations of a 0.3% fall.