Monday, April 22News For London

UK economic slows, rising question of economic health after Brexit

After a growth over the summer, Britain’s economy lost its speed in three months to October, latest official data shows.

According to the Office for National Statistics, GDP grows by 0.4 per cent from July to October, coming down from 0.6per cent, the rate of the third quarter of the year. In October, the GDP growth is 0.1 per cent. The increases are roughly flat in the three most recent month, August, September and October.

“The latest data confirm that UK GDP growth is slowing after a strong performance in the middle of the year, and the risks appear to be to the downside ” Garry Young, head of macroeconomic modelling and forecasting at NIESR recommends.

In this three months, services sector, with a 0.3 per cent growth, and construction sector are the main contributors to GDP growth this time. However, the manufacturing industry showed no increase in the latest three months. The retail and wholesale sector has a decline of 0.02 per cent, in sigh of the worst period for car sales since the financial crisis and the continuing woes on the British high street.

It seems that the UK’s economy is not as good as expected. Some economists have hoped that a recovery in real wage growth would support consumer spending during the final three months of the year, however consumers inclination didn’t increased. Howard Archer, a chief economic advisor, said that “ we are a little downbeat.”

Why has the ecnomic growth slowed? Rob Kent-Smith, the head of national accounts at the ONS said: “GDP growth slowed going into the autumn after a strong summer, with a softening in services sector growth mainly due to a fall in car sales.” It is also said that the slower rate of growth reflects growing uncertainty over Brexit, economists commented.

The trade of Britain is widened as well. The imports increased by £3.6 billion in October while the amount of export goods and products is much slower and the trade deficit widened to £3.1 billion. The head of economics at the British Chambers of Commerce said: “The widening in the UK’s trade deficit is a concern and reflects a sharp rise in goods imports.”

However, from the data from Office for National Statics, constant price gross value of education remains almost unchanged during this three monthes.