The UK economy showed promising signs of picking up for the first quarter of 2019; however, it has been noted that much of the growth was down to the stockpiling of goods prior to Brexit due to fears that delays would be experienced at borders.
About This UK Economic Growth
Economic growth for the final quarter of 2018 was lethargic at just 0.2%, according to the Office for National Statistics (ONS).
So, a 0.5% growth figure for the first quarter of 2019 is seen as promising. Indeed, manufacturing grew at its fastest rate since 1988, although the ONS did comment this was primarily due to a rush to complete and deliver orders prior to the Brexit deadline which was originally set for 29 March.
One sector showing extreme growth was pharmaceuticals which expanded by 9.4$ over the quarter from January to March 2019.
However, many other manufacturers contributed to this stockpiling exercise too, which led to a boost in imports and a large exports trade deficit.
The total deficit amounted to £18.3bn, vastly more than the £8.9bn posted for the previous quarter. Much of the deficit was driven by huge increases in the import of gold and cars.
Hammond Calls Figures Robust
According to the UK Chancellor, Philip Hammond, the figures indicated that the UK economy is in a “robust” state of health.
He said: “These GDP figures this morning show again that the UK economy is performing robustly, despite the evidence of slowing global growth and the continued Brexit uncertainty at home – so it’s good news“.
Expert analysts do fear, though, that this economic boost will be short-term.
Tej Parikh is a senior economist at the Institute of Directors and commented:
“Some businesses brought activity forward early this year in preparation for leaving the EU, so higher stocks and earlier orders have artificially bumped up the growth numbers. In the second quarter, many firms will be keen to run down their Brexit caches, which will drag on economic growth.”
One senior UK Economist at Capital Economics, Ruth Gregory, feels quite optimistic, however.
She said these figures showed “encouraging signs that underlying growth gained some pace” and pointed out that solid household consumption growth and business investment were also strong features of this economic upswing.