The Gulf Time Newspaper One of the finest business newspapers in the UAE brought to you by our professional writers and editors.
Bloomberg
The UK economy lost momentum in the three months through October, a further sign of the toll being taken by Brexit uncertainty.
Growth slowed to 0.4 percent from 0.6 percent in the third quarter, the Office for National Statistics said on Monday. In October alone, growth was just 0.1 percent, with the economy being spared a third month of stagnation by a rebound in the dominant services industry.
A heatwave-induced surge in the early summer proved short lived. Fears about a no-deal Brexit are weighing on confidence in the final quarter, as shown by recent purchasing-management surveys. Growth slowed across all key sectors of the economy from the quarter though September. Annualised growth was 1.4 percent. October alone saw services rebound but construction and manufacturing declined.
Markets see the Bank of England refraining from rate increases for another year at least. But the inflation shock from a chaotic Brexit may make it hard to loosen monetary policy to aid the economy, as officials did after the 2016 referendum. Despite the fall in the pound since the referendum, the contribution to growth from trade has been disappointing.
In October, the deficit in goods widened. Revisions to the third quarter showed the deficit in goods and services widening to 9.8 billion pounds, wiping out any contribution from trade to growth. The deficit was previously estimated to have narrowed to 2.9 billion pounds.
Manufacturing shrank 0.9 percent in October, with eight of 13 sectors posting declines. Motor vehicle output fell 6.6 percent amid demand-induced shutdowns and basic pharmaceuticals dropped 5 percent.
Overall industrial production fell 0.6 percent — oil and gas extraction rose on the month — and the annual decline of 0.8 percent was the most since 2016. Services gained 0.2 percent, the first increase since July, boosted by accountancy and audit and software programming.
Motor trades, which were hit by EU emissions standards in September, also rose as activity was displaced to October.
Construction output fell 0.2 percent, with housing, infrastructure, repairs and maintenance all declining.
Trade deficit widens to 11.9 billion pounds as imports rose 3.5 percent, outstripping a 0.8 percent increase in exports. The deficit excluding oil and erratics widened to 12 billion pounds, the most since August last year.
But the ONS says import growth is no higher than the 12-month average, suggesting there is little evidence in the trade figures of stockpiling in anticipation of a chaotic Brexit.