Economic growth slows again to 0.2% in the final three months of 2018 as car manufacturing plunges at its fastest rate in a decade
- Economic growth in October to December was 0.2%, the first ONS estimate says
- The figure is a marked slowdown from 0.6% growth between July and September
- Means the economy grew at its slowest rate since 2009, recording 1.4% growth
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.
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.
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.
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.