ONS reported that UK economy has fallen with reduced car sales. Manufacturing sector has stalled with this plummet. Economic growth in 3 months till October was 0.4% as compared to 0.6% in 3 months till September. Rising imports and falling exports also widened trade deficit. Growth in 3 months to September was greatest since late-2016. Decline was also seen in pharmaceutical sector while infrastructure and house building industries grew with 0.3% growth on 3-month rolling measure. This industry constitutes 80% of UK’s economy.
Accountancy services experienced modest growth but shop sales fell. Retail industry saw 0.5% overall growth but with exclusion of food, growth was flat. Purchasing managers’ index recorded worst reading in services sector since July 2016. Impacts of Theresa May’s troubles however won’t be known until January. After a flat GDP in both August and September, October saw 0.1% GDP growth. Construction industry output fell 0.2% as manufacturing sector did 0.9% reducing industrial production by 0.6%. Chris Williamson of IHS Markit said that with the stalling speed, economy could also contract as 2019 approaches. Only reviving demands could prevent this from happening.
Trade deficit of UK in October became £3.1bn according to ONS reports. Despite the pound weakness, imports grew by £2.3bn, greater than exported amount, which grew by £1.9bn. September data shows £2.3bn deficit as compared to the previous £0.1bn.SurenThiru of BCC expressed his concern over UK’s rising trade gap.
As October became the face of the year’s 4th quarter, experts and economists like Mr Williamson believe that Brexit negotiations could affect economic progress in the months to follow. Yael Selfin of KPMG UK stated that weak growth in service sector isn’t a good reflection of the year’s last quarter. Ever since the financial crisis, annual GDP growth for 2018 is expected to be 1.3%, which is the lowest according to Capital Economics.