UK economic growth set to show pre-Brexit Q1 boost

Brexit expected to curtail growth
Brexit expected to curtail growth
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Britain’s economic growth is expected to have accelerated in the first quarter, but economists warned that the boost will not be reflective of the delay to Brexit.

Economists believe that gross domestic product (GDP) growth slowed to 0.5% in the three months to March.

It comes after growth slowed to 0.2% in the final quarter of last year, meaning annual GDP for 2018 grew just 1.4%, the weakest level since 2009.

Economists expect a rise in growth in early 2019, mainly due to stockpiling in manufacturing and to a smaller extent by consumers amid concerns that a no-deal Brexit would occur at the end of March.

Howard Archer, chief economic adviser to EY Item Club, said the jump would not translate into a longer term growth trend, thanks to the postponement of the Brexit deadline.

“Delays to Brexit, a difficult domestic economic and political backdrop and slower global economic activity have resulted in a weaker outlook for UK GDP growth this year,” he said.

“Prolonged uncertainty is likely to impact on businesses’ willingness to invest and commit to any new major projects.

“There is also likely to be a hit to economic activity from some unwinding of the stockpiling that occurred in Q1.”

In addition to manufacturing, momentum is expected in the real estate sector, especially industrial lettings which benefited from companies using additional space for stockpiling.