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Zero growth for UK economy in final three months of 2019

The UK economy flat-lined in the final three months of 2019, according to preliminary official figures.

The Office for National Statistics (ONS) recorded output growth of 0% in the period compared to the previous three months as the country’s political parties fought and held a bitter general election on the back of sustained parliamentary deadlock over Brexit.

Growth in household spending of 0.1% was at its weakest in four years, the data showed, culminating in a largely miserable Christmas for the retail sector which banished economists’ hopes for a post-election ‘Boris bounce’.

The zero growth rate followed 0.5% growth between July and September.

It meant the economy grew by 1.4% during 2019 – slightly faster than the 1.3% achieved the previous year.

The ONS described 2019 as “volatile”.

In addition to the changing Brexit deadlines, which resulted in several temporary car plant closures and some boosts from stockpiling that were later reversed, there was also the effect of the US-China trade war to contend with.

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Rob Kent-Smith, head of GDP at the ONS, said: “There was no growth in the last quarter of 2019 as increases in the services and construction sectors were offset by another poor showing from manufacturing, particularly the motor
industry.”

The figures covering December only showed some pick-up – with services rising 0.3% on November.

Manufacturing and construction were also 0.3% and 0.4% higher respectively.

Those figures were seen as giving the pound a small boost – rising 0.2% against the dollar to $ 1.2936 – as it supported hopes of growth ahead.

Closely-watched survey data covering January suggests that while consumers remain constrained, business activity has surged in the wake of Boris Johnson securing his large majority.

It has also been suggested that the rejection of a Jeremy Corbyn-led government has also boosted sentiment.

A big unknown – a Brexit trade deal with the EU – remains however in the run-up to the year end deadline for a deal.

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