UK economy grew faster than forecast at start of 2019

Quarterly growth of 0.3% defies expectations of Brexit dampening

The figures follow on from an unexpectedly strong growth in January. Photograph: Reuters

The figures follow on from an unexpectedly strong growth in January. Photograph: Reuters

 

The UK economy grew faster than expected during the three months to February, despite expectations that Brexit uncertainty would dampen activity during the first quarter of the year.

Britain’s economy was 0.3 per cent bigger in the three months to February than the previous three months, the Office for National Statistics (ONS) said on Wednesday morning.

Economists were expecting growth of 0.2 per cent, according to a survey by Thomson Reuters. In February alone the economy grew by 0.2 per cent compared to expectations of stagnation.

The figures follow on from an unexpectedly strong growth in January. The British economy grew by 0.5 per cent during the first month of the year following a sharp contraction in December.

Britain’s manufacturing output rose to its highest level since the crash in 2008 during February, thanks to 0.6 per cent growth during the month, with a notable rise in computer and electrical components.

The ONS said there was anecdotal evidence that “manufacturing businesses changed the timing of their activity as we approached the original planned date for the UK’s departure from the European Union. ”

Originally scheduled

Britain was originally scheduled to leave the EU on March 29th. Other surveys of businesses have suggested that factories increased production during the first quarter of 2019 to build up stockpiles of both finished goods and components in order to prepare for a “no-deal” Brexit.

ONS head of gross domestic product Rob Kent-Smith said: “GDP growth remained modest in the latest three months. Services again drove the economy, with a continued strong performance in IT.”

“Manufacturing also continued to recover after weakness at the end of last year with the often-erratic pharmaceutical industry, chemicals and alcohol performing well in recent months.” – Copyright The Financial Times Limited 2019