The economy of the United Kingdom is growing at the lowest yearly rate in around 10 years as the 3rd quarter of 2019 displays financial uncertainties over Brexit, which has continued to adversely impact businesses.
The economy of the country rose by only 1 per cent in the 3 months preceding September, in comparison to the same period in the previous year. The data was revealed by the Office for National Statistics. This is the weakest yearly growth rate since the beginning of 2010.
While the UK has managed to avoid going into a recession, following a negative reading in the 2nd quarter, the growth rates rebound to 0.3 per cent are not a positive for the government which is set to enter elections in around a month. All of the data is indicative of a distressed economy.
Multiple years of economic uncertainty over Brexit has had a massive impact on productivity and investments, which has resulted in calls to the Bank of England for additional stimulus.
Stagnated Manufacturing Contributes to Stresses
Manufacturing activity across the country was stagnant for the whole of the 3rd quarter, and the trade deficit reduced owing to the rise of exports of products and services. However, the key strength of the economy came from higher levels of household spending.
Ruth Gregory, a senior economist for Capital Economics stated: “Unless Brexit uncertainty fades and a fiscal boost is forthcoming, then this might make the Bank of England more inclined to cut interest rates before long. With the election just under five weeks’ away, clearly this isn’t the good news the government might have hoped for.”
The upcoming general election is the third attempt in the past 4 years to break a deadlock in the parliament regarding the issue of Brexit, which has impacted investment and business activity substantially. So far, the outcome for the elections seem uncertain, and fears are strong about further chaos about how the United Kingdom is planning to conduct trade for the foreseeable future.