The latest figures from the Office for National Statistics (ONS) showed that the UK’s economy grew by just 0.2% during the fourth quarter of 2018, down from 0.6% over the three months to September.
This caused GDP growth to total 1.4% in 2018, down from 1.8% in 2017. The ONS attributed the slowdown to lower levels of construction, car production and factory output. Economists suggest this may have been down to lower investment spending and businesses taking a “wait and see” approach as a result of the uncertainty created by Brexit.
Helal Miah, investment research analyst at stockbroker the Share Centre, explained: “The Brexit impasse is now really showing through onto UK economic activity levels. Fourth quarter 2018 GDP preliminary figures this morning have not made pleasant reading.”
Miah’s sentiments are echoed by Ben Bettrell, senior economist at investment platform Hargreaves Lansdown, who noted: “There’s little doubt Brexit uncertainty is responsible for the disappointing numbers, though concerns over global trade will also have played a part. Business investment – the most Brexit-sensitive element of GDP – dropped 3.7% in the fourth quarter against a year earlier, the biggest fall since early 2010.”
The announcement caused sterling to fall by 0.25% against the dollar to $1.2898, before rising back up to $1.2929 (representing a 0.11% fall) at the time of writing.