United Kingdom economic growth slowest since 2012

The British economy plunged into reverse in December as Brexit draws nearer, with a broad-based slump in economic output completing the weakest year for growth since 2012.

An employee operates a forklift to move goods at the Miniclipper Logistics warehouse in Leighton Buzzard, Britain December 3, 2018.

Britain's economy grew at 0.2% between October and December, a fall from 0.6% in the previous quarter attributed to the World Cup and the extended period of warm weather during the summer.

Annual domestic GDP growth for 2018 was 1.4 per cent, the lowest it has been since 2012.

Sterling fell on the news from $1.292 to $1.290.

David Cheetham, chief market analyst at XTB, said: "The latest signs suggest that United Kingdom economy activity is slowing further, with the month on month decline of 0.4 per cent particularly concerning". Exports suffered from weak global demand, while domestic activity was constrained by the political impasse over Brexit in Westminster.

Monday's data showed net trade lopped more than 0.1 percentage points from the fourth-quarter growth rate.

Business investment decreased by 1.4 per cent in the last quarter, the fourth consecutive quarter in which there has been a decrease in growth. Falling business investment did similar damage.

Head of GDP at the Office for National Statistics Rob Kent-Smith said: "GDP slowed in the last three months of the year with the manufacturing of cars and steel products seeing steep falls and construction also declining".

Finance minister Philip Hammond said the data showed the economy remained "fundamentally strong" and that public-sector forecasters did not foresee a recession. This marked the longest negative run since September 2008 to February 2009, the depths of the financial crisis.

The figures revealed that business investment fell for the fourth quarter in a row - in a first since the last recession in 2009 - as the lack of clarity over Britain's future trading relationship with the European Union led companies to pause their investment plans.

Overall, business investment has stalled since June 2016's referendum, which the BoE blames for stagnating economic productivity.

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