2018.12.1009:54:00UTC+00UK Economic Growth Slows As Brexit Uncertainty Intensifies

UK economic growth slowed in the three months to October, mainly due to a fall in car sales and stagnation in manufacturing, as the uncertainty surrounding the country's decision to leave the European Union, dubbed Brexit, intensified.

Gross domestic product grew 0.4 percent in the three months to October, which was slower than the 0.6 percent expansion in the September quarter, figures from the Office for National Statistics showed on Monday. The latest rate of growth was in line with economists' expectations. Growth for the month of October was 0.1 percent versus stagnation in the previous two months. This was also in line with economists' expectations. Services sector rebounded with 0.2 percent growth in October after a 0.1 percent slump in September and stagnation in August. Manufacturing contracted 0.9 percent and construction shrunk 0.2 percent, leading to an overall 0.6 percent decline in production in October. Year-on-year economic growth was steady in October at September's 1.5 percent. "The latest GDP data is further evidence that the drag effect of persistent Brexit uncertainty and the significant cost pressures faced by consumers and businesses is taking its toll on the UK economy," Suren Thiru, head of economics at the British Chambers of Commerce, said. Separate data from the ONS showed that the UK visible trade deficit widened to GBP 11.87 billion in October from GBP 10.68 billion in September. Economists had forecast a shortfall of GBP 10.5 billion. The total trade deficit was GBP 3.30 billion versus GBP 2.33 billion in the previous month. Economists had expected a deficit of GBP 1.27 billion. The third quarter total trade deficit was revised down by GBP 6.9 billion to GBP 9.78 billion, mainly due to a downward revision in exports. The ONS also reported on Monday that industrial production decreased 0.6 percent month-on-month in October, led by a 0.9 percent fall in manufacturing. Economists had expected a modest increase of 0.1 percent in production and stagnation in manufacturing. On a year-on-year basis, industrial production decreased 0.8 percent in October after stagnation in September. That was the first fall since April 2017. Manufacturing output dropped 1 percent year-on-year, marking the first decline since October 2016.