Britain’s GDP contracts by 0.2 pct in Q2

Britain’s gross domestic product (GDP) contracted by 0.2 percent in Quarter 2(Q2), unrevised from the previous estimate, the Office for National Statistics (ONS) said on Monday.

According to the ONS, the services sector continued to provide the main positive contribution to overall GDP growth, but slowed to its weakest rate in three years, alongside falls in the production and construction sectors in Q2.

With an upwardly revised rise of 0.6 percent in the first quarter, the British GDP has been volatile through the first half-year of 2019.

The ONS noted that the volatility largely reflecting changes in the timing of activity related to Britain’s original planned exit date from the European Union in late March.

“There is evidence that stockpiling and the change in timing of activity was taking place in the first quarter of the year, which likely provided a boost to GDP, with the latest figures suggesting that these increased stock levels were partly run down in Q2”, the ONS said.

“Furthermore, it was also reported that a number of car manufacturers had brought forward their annual shutdowns to April as part of Brexit-related contingency planning.”

John Hawksworth, chief economist at PwC UK said the latest GDP data also showed Brexit uncertainty hits investment. He said: “Total investment in the economy has been much more volatile, falling in four of the past six quarters as businesses remain cautious about investing in the face of Brexit-related uncertainty and a slowing global economy.”