The UK economic growth witnessed its slowest annual rate in six years in 2018 after a sharp contraction in December. Growth in the year was 1.4%, down from 1.8% in 2017 and the slowest rate since 2012, the Office for National Statistics (ONS) said. The ONS blamed fall in factory output and car production for the slowdown, among other factors. It forecasts slower growth in 2019 due to Brexit uncertainty and a weaker global economy.
According to the ONS, quarterly growth also slowed, falling to 0.2% in the three months to December - down from 0.6% in the three months to September. However, Chancellor Philip Hammond said the data showed the economy remained "fundamentally strong" and that he did not foresee a recession. Head of GDP at the ONS Rob Kent-Smith said: "GDP slowed in the last three months of the year with the manufacturing of cars and steel products seeing steep falls and construction also declining. "However, services continued to grow with the health sector, management consultants and IT all doing well."
A slowdown was expected. But the economy has hit the brakes harder than economists thought it would. Growth over the quarter was weaker than the 0.3% anticipated. And over the month the numbers look positively worrying. According to the ONS estimates, gross domestic product fell in December by 0.4%. This is the first time since 2012 that services, construction and production all fell.
The ONS said the figures reflected a slowdown across a number of industries, as Brexit-related concerns weighed on business spending decisions. In the final quarter of last year, it found car manufacturing declined at its steepest rate in just under a decade, slipping 4.9%. Construction fell 0.3% while business investment dropped 1.4%. While Britain's dominant services sector continued to expand, growth slowed to 0.4% following a strong performance during the summer.
