British economy slows as manufacturing and car sales hit growth

Britain’s economy continued to cool in the three months to November as a “steep decline” in manufacturing activity dragged on growth amid increasing Brexit uncertainty.

Over the three months to November, GDP rose 0.3% compared with the previous quarter, according to the Office for National Statistics (ONS).

Growth of 0.4% was recorded in the three months to October.

The ONS said the largest downward drag came from a fall in motor vehicle production of 4.3%.

The manufacturing sector has been hit by factory shutdowns – such as at Jaguar Land Rover – and weaker consumer demand for cars and declining diesel sales.

Head of national accounts at the ONS Rob Kent-Smith said: “Growth in the UK economy continued to slow in the three months to November 2018 after performing more strongly through the middle of the year.

“Accountancy and house-building again grew but a number of other areas were sluggish.

“Manufacturing saw a steep decline, with car production and the often-erratic pharmaceutical industry both performing poorly.”

On a rolling three-month basis, the manufacturing sector contracted by 0.8% and month on month it fell 0.3%.

Industrial production as a whole contracted 0.8% in the three months to November amid a global slowdown, as the US and China hammer out a new trade deal.

Month on month, the UK economy grew by 0.2% in November, compared with growth of 0.1% in October.

The lacklustre figures come as Prime Minister Theresa May again attempts to gain parliamentary approval for her Brexit deal.

Mike Jakeman, senior economist at PwC, said: “The latest monthly GDP data adds to existing impressions that the economy is slowing as uncertainty over Brexit intensifies.

“The clear loss of momentum in the UK economy since the summer is as expected, given the ongoing lack of clarity on Brexit.

“For as long as this remains unclear, businesses will continue to defer major investment plans and households will reconsider making big-ticket purchases.”

Month on month, construction grew 0.6% in November. Manufacturing contracted 0.3%, while services activity rose 0.3%.

Separately, the ONS data dump also showed that Britain’s total trade deficit narrowed by £200 million to £7.9 billion in the three months to November 2018 as both goods and services exports increased £100 million more than their respective imports.

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