Tuesday, February 11, 2020 - 05:00

MNI DATA IMPACT: No UK Growth In Q4 Despite Govt Spending Boost

By Irene Prihoda and Les Commons

LONDON (MNI) - The UK economy flatlined in Q4 following an upward revision to growth in Q3, leading to a modestly better than expected reading for annualised growth. Household spending slowed to a four-year low across the quarter, while government spending rose at the fastest pace since early 2012.

The following are the key points from UK GDP data published Tuesday by the Office for National Statistics.

-- UK quarterly growth matched expectations in Q4, coming in at 0.0% after Q3 data was revised to +0.5% from 0.4% at the second estimate (initial estimate +0.3%).

-- Government spending rose 2.1% on the quarter, the fastest pace of growth since Q1 2012 and above market forecasts of a 0.5% increase. The spending boost was in part driven by Brexit preparations and in part by increased general spending.

-- Although services were again a net contributor to growth, household spending grew just 0.1% on quarter, down from 0.4% in Q3 to the slowest rate of growth since Q4 2015. Over the quarter, services rose just 0.1%, down from 0.5% in Q3. The last time the quarterly growth rate was lower was Q2 2009.

-- Industrial output eked out modest gains in December, but was still a drag across the quarter, down 0.8% q/q, with manufacturing output down 1.1% q/q.

-- A gbp 11.2 billion increase in exports of precious metals aided the gbp 11.3 bn gain in unspecified goods exports, which in turn boosted total trade in goods. Excluding unspecified goods, the trade in goods total trade deficit widened by gbp 4 billion to gbp 6.6 billion in Q4 and the trade in goods deficit narrowed gbp 1 billion to gbp 27.5 billion.

-- December saw a modest bounce across many sectors after a very weak November, perhaps boosted by a pick-up in confidence after the mid-Dec general election saw the Conservatives returned to power with an 80-seat majority.

-London bureau: 44 (0) 203 865 3812; email:


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