UK's November economic expansion slows to weakest pace since 2012
The slowdown in annual pace of growth comes on the back of a sharp fall in output
Britain’s economy grew at its weakest annual pace in more than seven years in November, after output fell sharply that month, though a stronger performance in previous months brightened the picture slightly.
Political uncertainty hung over British businesses and consumers in late 2019, when the country had been due to leave the European Union on October 31 until parliament forced a delay and Prime Minister Boris Johnson called an early election.
Official figures on Monday showed the economy in November was just 0.6 per cent larger than a year-year level, the weakest expansion since June 2012, down from annual growth of 1 per cent in October, which represented an upward revision from previously reported data.
Output in November alone shrank by 0.3 per cent, the biggest drop since April, when businesses ran down stocks of goods built up in anticipation of a disruptive no-deal Brexit at the end of March, the Office for National Statistics (ONS) said.
Economists polled by Reuters had expected growth to remain flat in November.
Looking at the three months to November, which smooths out some volatility, the economy grew by 0.1 per cent versus poll forecasts for a 0.1 per cent fall, reflecting unexpected upward revisions to output in October and September, which the ONS said reflected late survey returns.
“Overall, the economy grew slightly in the latest 3 months, with growth in construction pulled back by weakening services and another lacklustre performance from manufacturing,” ONS statistician, Rob Kent-Smith, said.
The period covered both the politically turbulent run-up to an October 31 Brexit deadline, which parliament forced the prime minister to defer, and the start of an election campaign, when Mr Johnson chose to put his Brexit plans to the public rather than seek support from opposition legislators.
He won an unexpectedly large majority in the December 12 vote and private-sector business surveys since then have pointed to a recovery in sentiment at the tail end of 2019 and the very start of 2020.
The new parliament has approved Mr Johnson’s plans to take Britain out of the EU on January 31, which will start the clock on an 11-month transition period during which Mr Johnson wants to negotiate a long-term trade deal with the European bloc.
European Commission President Ursula von der Leyen called this timescale “basically impossible” when she met the prime minister last week, and with Mr Johnson ruling out an extension to the transition period, some businesses fear they could face tariffs and other obstacles to trade with the EU from 2021.
Updated: January 13, 2020 03:17 PM