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Britain’s Brexit-facing economy avoided recession in the third quarter with stronger growth than previously thought, official data showed on Friday.
Gross domestic product rebounded by 0.4 percent in the July-September period, according to a final estimate from the Office for National Statistics (ONS), which cited a boost from net trade. That marked a modest upgrade from the prior figure of 0.3 percent, and followed 0.2-percent shrinkage in the second quarter. Another contraction would have placed the economy in a technical recession.
“This follows volatility in the first half of the year, which largely reflected changes in the timing of activity related to the UK’s original planned exit date from the European Union,” the ONS said.
Analysts also sounded a note of caution because net trade provided only a temporary lift to third-quarter activity.
“Christmas has come early with the ONS revising up GDP growth … in its annual data deluge before the festive break,” said economist Andrew Wishart at research consultancy Capital Economics.
Brexit was originally scheduled for March 29, 2019, at the end of the first quarter — meaning many firms brought forward activity ahead of the initial deadline.
“This net boost (for trade in the third quarter) won’t be sustained,” added Wishart.
“It reflects a faster recovery in exports than imports in Q3 from a Brexit-deadline driven dip in Q2 as firms brought trade forward into Q1 from Q2.
“The underlying picture is still that there is very little momentum in the economy.” Parliamentary deadlock means that Brexit has now been delayed three times — firstly to April 12, then to October 31, and most recently to January 31, 2020.
Conservative Prime Minister Boris Johnson won a landslide election last week with a vow to finally “Get Brexit Done” at the end of next month, more than three and a half years after Britain voted to leave the EU in a knife-edge referendum.
(TDS)
