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Sterling drops after GDP data confirms economic slowdown
February 12, 2019
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LONDON: Sterling extended its fall on Monday after data showed that Britain’s economy last year grew at its slowest since 2012, with Brexit uncertainty hitting investment.

The quarterly GDP numbers followed other data in recent weeks that paint a picture of a UK economy slowing into 2019 as businesses and consumers grow increasingly nervous about Britain’s departure from the European Union.

Gross domestic product growth in the final quarter of 2018 fell to a quarterly rate of 0.2 per cent from 0.6 per cent in the previous quarter - in line with the average forecast in a Reuters poll but slightly weaker than the Bank of England estimated last week.

For 2018 as a whole, growth dropped to its lowest since 2012 at 1.4 per cent, down from 1.8 per cent in 2017.

The pound fell 0.3 per cent to as low as $1.2895 after trading at $1.2923 before the data was released.

Against the euro, sterling dropped 0.3 per cent to 87.72 pence per euro from 84.55 pence earlier.

“The thing that worries me most is that the monthly numbers for GDP were dreadful,” said Kallum Pickering, UK economist at Berenberg. “The monthly data can be volatile but that does not bode well heading into 2019 with peak Brexit uncertainty” and signs of slowing economies in the eurozone and the United States, he said.

Britain’s economy contracted 0.4 per cent in December, against the zero growth forecast by economists polled by Reuters.

Reuters

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