UK economy shrinks by 0.2 per cent

The second quarter British economy shrank for the first time in seven years as stockpiling slowed and Brexit vagueness intensified and underperformed the Eurozone, the US and Japan where outputs continued to expand at rates varying from 0.2 per cent to 0.5 per cent.

Output fell 0.2 per cent and down from a 0.5 per cent expansion, in the first quarter, as per data from the Office for National Statistics. Britain’s economy has not contracted since the final three months of 2012.

Chancellor of the exchequer, Sajid Javid blamed at broader economic weakness across the globe saying there had been “challenging period across the global economy”.

The Sterling hit a two-and-a-half year low and fell 0.6 per cent against the dollar to below $.21 and 0.7 per cent against the Euro to €1.0733. The Pound has fallen more than 4.5 per cent against the dollar  since the start of July over fears that Boris Johnson’s government was pushing the UK towards a no-deal EU exit in October 2019.

The panic rush to stockpile products in the run-up to the original Brexit deadline of March 29 boosted the economy, but when an extension was granted companies ran down their hoards.

Household spending grew 0.5 per cent aided by robust wage growth and low unemployment.

Manufacturers have struggled with inventory levels in the face of looming no-deal Brexit.