The UK financial system contracted within the second quarter for the primary time in virtually seven years amid rising Brexit uncertainties and weakening world development.
Output fell zero.2 per cent within the three months to June, worse than the flat efficiency anticipated by economists and down from a zero.5 per cent growth within the first quarter, in accordance with information from the Workplace for Nationwide Statistics. Britain’s financial system has not shrunk for the reason that ultimate three months of 2012.
“Manufacturing output fell again after a robust begin to the yr, with manufacturing introduced ahead forward of the UK’s authentic departure date from the EU,” stated Rob Kent Smith, head of gross home product on the ONS.
Companies offered the one optimistic contribution, however development within the sector slowed to the weakest tempo in three years and was not sufficient to offset the contraction in manufacturing. The manufacturing sector contracted by 1.four per cent within the second quarter, the most important drag on development, largely pushed by a 2.three per cent decline in manufacturing output.
The Financial institution of England anticipated no development within the second quarter in its August inflation report, launched final week.
Within the quarter, the UK financial system underperformed the eurozone, the place output expanded by zero.2 per cent.
The info despatched the pound again beneath $1.21 because it fell zero.four per cent in opposition to the US greenback. It fell zero.three per cent in opposition to the euro, nearing the two-year low it touched on Thursday at €1.0814. The pound has fallen greater than four.5 per cent in opposition to the greenback in July and August over fears Boris Johnson’s authorities is pushing the nation in the direction of a no-deal EU exit.