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UK economy slowest since 2012, as Brexit and global worries weigh

Reuters  |  LONDON 

By David and Andy Bruce

LONDON (Reuters) - Britain's economy slowed sharply in late 2018, pushing full-year growth to its weakest in six years as Brexit worries hammered investment by companies and the global economic slowdown weighed on trade, official data showed on Monday.

The pace of economic growth fell to a quarterly rate of 0.2 percent between October and December from 0.6 percent in the previous quarter, in line with forecasts in a poll, while output in December alone dropped by the most since 2016.

"The UK economy lost its summer exuberance in the final months of 2018, and there are signs of further chill winds ahead," at the said.

Sterling fell by a third of a cent to below $1.29.

For 2018 as a whole, growth dropped to its lowest since 2012 at 1.4 percent, down from 1.8 percent in 2017.

Exports suffered from global weakness and consumers and businesses grew increasingly concerned about the lack of a plan for when Britain is due to leave the on March 29.

has so far failed to win parliament's backing for the plan she agreed with to avoid reimposing checks on goods exported from Britain.

Major economies around the world also slowed in late 2018, due in part to trade tensions between the and China, while Brexit is an added challenge for Britain.

Last week the chopped its forecast for growth this year by 0.5 percentage points to 1.2 percent, which would be the weakest year since the 2009 recession.

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

"GDP slowed in the last three months of the year with the of cars and seeing steep falls and construction also declining," said.

In December alone, the economy contracted by 0.4 percent, the biggest fall since March 2016.

said the data showed the economy remained "fundamentally strong" and that public-sector forecasters did not foresee a recession.

dropped 3.7 percent in the fourth quarter compared with a year earlier, the biggest fall since the first three months of 2010, when Britain was emerging from recession. Investment has contracted for four consecutive quarters, the longest run since the third quarter of 2009.

Household spending - which offered an unexpectedly strong boost to growth in mid-2018 - remained resilient, up 1.9 percent on a year ago, as did government spending.

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

The BoE expects business and housing investment to fall this year, and for export growth to halve.

(Editing by Peter Graff)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, February 11 2019. 16:41 IST