The UK Office for National Statistics will release preliminary data today on national fourth quarter economic growth. The October to
The UK Office for National Statistics will release preliminary data today on national fourth quarter economic growth.
The October to December 2019 data is expected to show that GDP growth has held steady at 0.4%, a 0.6% increase from the second quarter when growth was in the negative.
The rebound is most likely due to gains in the service sector, which contribute approximately 79% of the UK’s GDP. Fading political uncertainty since Boris Johnson’s December election victory has seen increases in staff hiring and an upturn in companies’ willingness to spend.
With the UK now formally withdrawn from the EU, albeit it only politically, reduced uncertainty is likely to lead to further service gains and a potential increase in growth when the final fourth quarter data is released at the end of next month.
It is difficult to accurately gauge the true impact of Brexit on the EU economy as the UK currently faces a transition period in which it will remain in the EU’s customs union and single market until a future trade relationship is established. If negotiations over the future relationship fail or fall short of a free trade agreement, expect the uncertainty that took a considerable toll on the UK economy pre-Brexit to re-emerge in the post-Brexit era.
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