Slower UK Growth In The Quarter To January Despite Early 2019 Rise

  • Mar 14, 2019 GMT
  • Team Kalkine
Slower UK Growth In The Quarter To January Despite Early 2019 Rise

As per data published by the Office for National Statistics recently, the UK economy bounced back during the first month of 2019 but was not enough to offset the weakness at the end of last year. Economic growth held a constant pace of 0.2 per cent during the three months to the end of January, the same as during the final quarter of 2018 and in line with the expectations of the market.

As a result of the ongoing Brexit negotiations, Britain’s economy had weakened. There had been a decline in both manufacturing and construction due to uncertainty over the UK’s exit from the EU and a global economic slowdown. There was strong growth in wholesale, IT and health services but not enough to offset the fall in the manufacturing of metal products, automobiles and construction repair work. The manufacturing sector had more dependence on exports as compared to the other sectors of the economy. The sector’s output is highly dependent on the health of the global economy rather than the EU only.

The automobile manufacturing industry has seen a global slowdown, as there was a decline in sales in China and there were after-effects of Dieselgate scandal as well as the transition to electric cars. In January the economy grew by 0.5 per cent and lifted after an exceptionally poor performance in December. In January recovery was driven by the strong growth of pharmaceuticals and retail industry.

The pharmaceuticals sector’s output was up by 5.7 per cent after a rapid decrease in December. The healthcare industry saw several big vertical integrations in 2018, for example, Atena and CVS. These deals helped in gaining efficiency and lowering down the cost of care, and long-term impacts are still not determined. It is certain that this trend will likely continue in 2019 as the industry looks to find new methods to control the costs and increase margins.

The IT sector is performing far better than the other sectors of the economy regarding the business outlook in 2019. There had been ongoing trade issues reported by the companies, with uncertainty caused by Brexit leading to some businesses saying that they had delayed or held back investment in their business.

Consumers real incomes are growing at a healthy rate, and their spending is not affected by the Brexit. The surveys such as the purchasing managers’ indices were less reliable at times of political uncertainty. The PMI surveys pointed to a lack of growth at the start of 2019.

There were issues for statisticians in identifying the changing patterns of spending over the Christmas period to the Black Friday sales and the increasing shift towards online spending, creating doubts about how well the Seasonally adjusted retail values reflect underlying activity in the sector.

Nevertheless, the pace of UK economic growth remains dull, reflecting the impact of Brexit related uncertainty and similarly weak growth in the global economy outside of the United States and Canada. The short-term outlook for the UK economy depends very much on the outcome of the Brexit negotiations.

With Bank of England reducing the interest rates to a historic low level, the spotlight is back on diverse investment opportunities. 

Amidst this, are you getting worried about these falling interest rates and wondering where to put your money?

Well! Team Kalkine has a solution for you. You still can earn a relatively stable income by putting money in the dividend-paying stocks.

We think it is the perfect time when you should start accumulating selective dividend stocks to beat the low-interest rates, while we provide a tailored offering in view of valuable stock opportunities and any dividend cut backs to be considered amid scenarios including a prolonged market meltdown.

To know more about these dividend stocks, click here

We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK