- The UK economy ‘limped’ into the new decade after growth slowed down in the final three months of 2019.
- The services sector suffered amid uncertainty over Brexit and the general election, according to new research by the British Chamber of Commerce.
- The BCC estimates that growth slowed to 0.2% in the fourth quarter of 2019.
- The body believes that the UK economy will endure more hardship in 2020, predicting growth will slow to just 1% — its worst performance in over a decade.
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The United Kingdom’s economy entered 2020 in a state of stagnation as Boris Johnson prepares to take the country out of the European Union at the end of January.
Britain’s economy “limped” into the new decade and will continue to struggle over the next twelve months, according to the British Chamber of Commerce [BCC] which found that long-running uncertainty over Brexit is continuing to bite.
The BCC carried out a poll of UK 6,500 companies at the end of 2019, in order to gauge the health of the economy.
What it found was a gloomy picture of Britain’s economy as the country prepares to leave the EU this month and forge new relationships with Europe and the rest of the world.
Its findings suggest that factories’ export and domestic orders were negative for two consecutive quarters for the first time in ten years, while manufacturers’ investment plans were at their lowest in eight years.
The BCC estimated that growth slowed from 0.3% in the third quarter to 0.2% in the final three months of 2019, amid severe uncertainty over Brexit and the December general election.
The body believes that the UK economy will grow just 1% in 2020 — its worst performance in over a decade.
Suren Thiru, the BCC’s head of economics, said: “The UK economy limped through the final quarter of 2019.
“The fourth quarter was characterised by a broad-based slowdown in the dominant services sector with all key indicators weakening in the quarter, amid sluggish household expenditure and crippling cost pressures.”
The services sector — which Thiru said particularly suffered in the final quarter of 2019 — accounts for around 80% of the UK’s economic output.
Thiru added: “Despite some improvements, indicators in the manufacturing sector remain very weak by historic standards.
“A faltering service sector together with listless manufacturing activity points to a downbeat outturn for UK GDP growth in the fourth quarter of 2019.”
Opposition parties blamed Johnson’s Conservative government for the economy’s poor performance.
Shadow Chancellor John McDonnell said: “This survey of confirms, exactly as the vast majority of economists predicted in 2010, that the Tory economic strategy of austerity and lack of investment would result in a lost decade.”
“It’s not just the uncertainty caused by the government’s negotiations with the EU undermining our economy but 10 years of failed and discredited Tory economic policies.”
Ed Davey, the Liberal Democrats’ interim leader, told Business Insider: “The Tories are crashing our economy. Their disastrous Brexit is already hitting investment and growth — and we haven’t even left the EU yet.
“The fact that the economic predictions for growth in 2020 are the worst since the financial crash paints a depressing picture for the new year — and it’s time Johnson and the Conservatives held their hands up for their poor record.”