JAKARTA (TheInsiderStories) – The British economy grew at its slowest annual pace in nearly seven years in October, according to official figures. Gross domestic product rose by 0.7 percent against October 2018, the weakest growth since March 2012, with services the main driver, the Office for National Statistics (ONS) data showed on Tuesday (12/10).
In the three months to October, growth was flat against the previous quarter. The figures come ahead of Thursday’s general election, with the main parties all promising to boost growth.
Sterling’s rally will be limited even if Prime Minister Boris Johnson wins a parliamentary majority in the general election and finds a way to pass the withdrawal bill by Jan. 31. That’s because the clock is ticking on a trade agreement in a transition period that runs out at the end of 2020.
Although the service sector expanded 0.2 percent in the August-to-October period, that was offset by a 0.7 percent contraction in manufacturing and 0.3 percent fall in construction. The ONS said there had been “a notable drop in housebuilding and infrastructure in October”.
But it has shown signs of slowing since then as an Oct. 31 deadline for leaving the European Union (EU) – which has since been extended – approached. Further uncertainty about the outcome of the Dec. 12 national election is likely to have caused more caution among businesses since then.
Johnson has urged voters to back him and his Brexit deal, saying it would “unleash a great tide of investment” into Britain when it clears a currently deadlocked parliament.
The opposition Labour Party has said it will hold a fresh Brexit referendum after negotiating a new Brexit deal, potentially offsetting some of the concerns among many businesses about other Labour policies including higher corporate taxes and nationalization of some key industries.
Separately, the ONS released trade data which showed Britain’s goods trade deficit widened by more than expected to nearly £14.5 billion in October from £11.5 billion in September.
The total British trade deficit widened sharply to £5.19 billion in October 2019, the biggest since April, from a revised £1.92 billion in the previous month. Imports jumped 6.2 percent, while exports rose at a much softer 0.8 percent, still reaching an all-time high.
Imports of goods and services to the British rose 6.2 percent from a month earlier to £64.13 billion in October, following a 3.8 percent increase in September, the data showed.
Goods purchases jumped 8.3 percent, boosted by fuels (17.8 percent), chemicals (14.3 percent), food & live animals (5.8 percent), machinery & transport equipment (3.9 percent), and miscellaneous manufactures (1.4 percent). In addition, services imports advanced by 1.3 percent.
Meanwhile, exports from the British increased 0.8 percent from a month earlier to an all-time high of £58.94 billion, following a 0.6 percent advance in September, the ONS said.
Sales of goods rose 1.8 percent on the back of chemicals (1.9 percent), material manufactures (4.0 percent), machinery & transport equipment (1.4 percent), and miscellaneous manufactures (7.9 percent). Still, fuel exports slumped 11.7 percent. Exports of services, on the other hand, dropped by 0.2 percent, the data showed.
Written by Lexy Nantu, Email: email@example.com