MNI DATA IMPACT: UK GDP To Slow after Brexit-Fuelled Q1 Gain>

By Les Commons and Laurie Laird 

LONDON (MNI) - GDP growth was confirmed at a perky 0.5% pace over 

the opening months of 2019, and comes ahead of a widely-predicted 

slowdown in the current quarter. 

The following are the key points from UK National Accounts data 

published Friday by the Office for National Statistics.

     - Stockpiling ahead of the original late-March Brexit date lifted 

gross domestic product by 0.5% in the first quarter, with a 

downwardly-revised 1.9% gain in manufacturing adding 0.19 percentage 

points to growth. 

     - However, a 10.8% surge in imports, also linked to Brexit, led to 

a more than doubling of the trade deficit, subtracting a record-high 

2.99 percentage points from growth. 

     - The sharp deterioration in net trade fueled a surge in the 

current account deficit, to Stg30.045 billion, or 5.6% of GDP, the 

fifth-largest percentage ratio on record.  

     - Steady growth in the service sector (revised up to 0.4% q/q from 

the initially-reported 0.3%) masked a continual contraction in financial 

services, which slumped by 1.0% in the first quarter. 

     - Financial services have not recorded an increase in eight 

quarters, the longest calendar stretch on record, for a cumulative 

decline of 4.6% since Q1 2017. The sector contracted by 11.0% during the 

financial crisis, bottoming out in Q4 2010. 

     - Business investment expanded after four quarters of decline, but 

growth was revised downward to 0.4% q/q from the originally-reported 

0.5% gain. 

     - The relatively robust Q1 expansion could represent a high water 

mark for growth, as GDP contracted by 0.4% in April.  The Bank of 

England is expecting no growth in Q2, following a downward revision from 

their original forecast for a 0.2% expansion. 

-London bureau: 44 (0) 203 865 3812; email: ukeditorial@marketnews.com

[TOPICS: M$B$$$,MABDS$]