James Smith, developed markets economist at ING, points out that the UK economy grew by 0.2% on the November month, driven primarily by another better month for the service sector.
“Dig a little deeper though, and the picture still looks fairly grim.”
“Firstly, the manufacturing sector contracted for the fifth month in a row and on a year-on-year basis, is now shrinking at the fastest rate since before the 2016 referendum. Secondly, the most recent survey readings from the service sector suggest there was a pronounced slowdown in December, which looks set to persist into the new year.”
“The upshot is that growth looks set to be noticeably slower in the fourth quarter than the third, when activity was boosted by warm weather. We expect GDP growth in the 0.2/0.3% region in the final quarter of 2018, and something similar for the first three months of 2019.”
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