Brexit: Alarming contraction of UK economy

credit;SWNS

The UK economy took a huge knock in April as Brexit rumbles on.

It contracted by 0.4 per cent when compared to month before, marking its biggest monthly fall since March 2021.

It follows a decline of 0.1 percent in March 2021.

Industrial production declined by 2.7 per cent during April, with manufacturing shrinking by an alarming 3.9 percent.

This appears to be because of UK car plants shutting down in April, as manufacturers prepared for a no-deal Brexit which never came.

The ONS's head of GDP, Rob Kent-Smith said: “GDP growth showed some weakening across the latest 3 months, using the economy shrinking in the month of April mainly as a result of dramatic fall in car production, with uncertainty in front of the UK's original EU departure date leading to planned shutdowns.

“There was also widespread weakness across
manufacturing in April, because the boost from the early completion of orders ahead
from the UK's original EU departure date has faded.”

Yael Selfin, Chief Economist at KPMG UK, fears the UK faces a lot more months of weak growth:”The hangover that's followed britain's original exit date is proving stronger than anticipated. Today's figures signal the united kingdom economy will probably experience more subdued growth throughout the entire year, marred by Brexit uncertainty.

“The significant stop by car
manufacturing, and in broader manufacturing activity at the start of Q2, point
at more than just a turnaround of the stock building effect seen as businesses
ready for an expected Brexit in March.

“While services saw a small improvement in April, continued weakness of monetary services and also the hospitality sector do not bode well for the overall prospects for the economy this season.”