UK economic growth slowed to just 0.2% in the final quarter of 2018, while quarterly gross domestic product (GDP) growth slowed after a strong third quarter where it grew 0.6%, new data has revealed.
However, despite strong growth in Q3, the statistics published by the Office for National Statistics (ONS) found that annual domestic GDP growth for 2018 was 1.4%, the lowest recording since 2012, with it falling by 0.4% in December after growing by 0.2% in October and November.
Annual services sector growth was 1.7%, the lowest since 2011, while the production sector grew just 0.7%, the lowest since 2013 and construction growth was recorded at 0.6%, the lowest since 2012.
Furthermore, business investment decreased by 1.4% in Q4 2018, the fourth consecutive quarter in which there has been a decrease in growth.
Commenting on the results, The Share Centre investment research analyst Helal Miah said: “The Brexit impasse is now really showing through onto UK economic activity levels, Q4 2018 GDP preliminary figures this morning has not made pleasant reading.
“We were already anticipating a halving of the growth rate from Q3 of 0.6%, but the actual Q4 growth rate has come out at just 0.2%, while the year on year figure also slowed down to 1.3% from the anticipated 1.3%, the lowest since 2012.”
According to Miah, the UK economy is “clearly being hampered by Brexit”.
“We feel that assurances over the political environment is needed sooner rather than later for businesses to release pent up investment funds, but the next few weeks/months will probably continue to see the malaise lead to reduced economic activity.”
Trades Union Congress (TUC) general secretary Frances O'Grady echoed this point, highlighting that Prime Minister Theresa May's "failure" to rule out a no-deal Brexit is damaging confidence in the economy and holding back growth.
O'Grady added: "With our manufacturing sector in recession, the prime minister must act now to remove the threat of crashing out.
“As growth evaporates, the government must wake up and take action. An upgrade to infrastructure and public services would strengthen growth and support workers.”
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