UK economy grinds to a halt as GDP growth falls to five-year low
Britain’s economy ground to a halt in the first three months of the year as bad weather piled woes on top of squeezed household finances and a troubled construction industry.
GDP growth plunged to just 0.1 per cent in the first quarter of this year compared to the last quarter of 2017.
By contrast, in the previous quarter, the economy grew by 0.4 per cent, according to the Daily Telegraph.
Mark Carney, Governor of the Bank of England, is now expected to keep interest rates on hold at the Bank’s meeting next month, cancelling a long-anticipated hike.
“Our initial estimate shows the UK economy growing at its slowest pace in more than five years with weaker manufacturing growth, subdued consumer-facing industries and construction output falling significantly,” said Rob Kent-Smith at the Office for National Statistics.
Philip Hammond, the Chancellor, blamed the weather.
” However the ONS said the snow is a small part of the picture.
“While the snow had some impact on the economy, particularly in construction and some areas of retail, its overall effect was limited with the bad weather actually boosting energy supply and online sales,” said Mr Kent-Smith.
GDP per head fell by 0.1 per cent quarter on quarter, the first drop in two years.
The construction sector’s output plunged by 3.3 per cent, dropping in every month – not just those with the worst weather.
Manufacturing slowed to grow by just 0.2 per cent.
Production industries rose by a more impressive 0.7 per cent, as the oil and gas sector rebounded from pipeline closures late last year, and families turned up the heating.
Economists hope for an improvement in growth in the coming months.
But now Mr Carney and his colleagues have to judge whether or not this more severe crunch will have a longer-term effect on the economy.
One factor harming growth has been the fall in household spending power, as inflation outstripped wage rises for much of the past year, largely because the weak pound pushed up import costs.
Blame the weather! Dear God! It seems what little growth there was, was caused by Brits turning up their home heating! Is that the best UK economists can come up with?
By contrast, according to Trading Economics, “Turkey . . . is one of the world’s biggest producers of agricultural products; textiles; motor vehicles, ships and other transportation equipment; construction materials; consumer electronics and home appliances”. The Turkish economy grew 7.3% in the fourth quarter of 2017. The construction industry is booming!
The Economist noted that “In the third quarter of 2017 GDP surged by 11.1% year-on-year, outperforming all major countries”.
“The Organization for Economic Cooperation and Development (OECD) has revised up its estimate for Turkey’s economic growth in its global economic outlook.
In the interim OECD Economic Outlook, which was released on March 13, Turkey is estimated to have grown at 6.9 percent in 2017. In the organization’s previous report in November 2017, Turkey’s economic growth was estimated to exceed 6 percent in 2017, driven by strong fiscal stimulus and an export market recovery.
Turkey’s GDP is expected to rise by 5.3 percent for 2018 and 5.1 percent for 2019, from 4.9 percent and 4.7 percent respectively.”
In spite of that, the Turkish Lira has plunged to 5.59 to the pound sterling. If you didn’t believe international “money markets” are a monumental racket – I’m telling you now!