UK Economy Stalls Despite January Growth
Despite a particularly strong January, it seems like the UK's economy is still running through a few obstacles, and is currently stalling.
This is despite a recent report provided by the Office for National Statistics (ONS), which showed that there has been a pick-up in activity from January's economic expansion, which reached up to 0.5 percent.
What the numbers say
Per the latest report, Gross Domestic Product (GDP), or the total output of goods and services in the UK grew by about 0.2 percent in the three months to January's end. Furthermore, the services sector grew by 0.5 percent during a three-month basis. This sector accounts for around 80 percent of the private sector economy, and the numbers are mainly driven by wholesale and retail trade.
Additionally, Construction, which accounts for about 6% of the economy, reversed December's fall to grow by 2.8% in January, while Production and manufacturing output also grew, what with both sectors contracting in December last year.
Rob Kent-Smith, who works for ONS, stated that expected growth during the last three months had not exceeded the predicted forecasts and that it had "remained weak." He then cited falls in the output of metal products, cars and construction repair work, which are all variables in the dampening economic growth. In contrast to this, however, he cited that this struggle in growth was offset by a strong performance in IT, health, and wholesale services.
Information in numbers
So what do these numbers tell us? Well, according to Yael Selfin, who's the chief economist for KPMG, the confirmed growth and momentum reveals one thing: the UK's economy has stalled.
According to her, "The first glimpse of GDP data for this year points to a UK economy hovering well below its growth potential, as we wait for the Brexit fog to dissipate." However, Ms. Selfin also said that for now, she expects growth to remain "subdued in the short-term."
However, UK economist Andrew Wishart said that the numbers show that despite that stall, the UK economy is still handling the entire situation pretty well. He then added, "Of course, the data may deteriorate in February and March if Brexit has caused consumers and firms to reach for the handbrake."
Whatever the reason, the slowdown in growth may just be the result of Brexit, and so far, the economy is still holding up fairly well. For now, at least.