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Figures Show That the UK Economy Stagnated in October

The latest figures to be released by the Office for National Statistics (ONS) show that the British economy stagnated during the month of October. In fact, if we take into account the last three months, we can see that the economy has just gone through its worst spell in over ten years.

The Overall Situation

The data from the ONS pointed to a month with no growth in the national GDP. This came after two months of contraction. It adds up to the poorest three month performance since the beginning of 2019.
If we look at the period from August to October this year, the service sector is one of the bright spots. It produced an expansion of 0.2% during these three months. In September, the UK had come close to entering into recession. This was avoided by the narrowest of margins when a 0.3% growth rate was recorded.

On the other hand, manufacturing levels dropped by 0.7%. The construction industry also contracted, with a 0.3% drop noted. The ONS pointed out that house building and infrastructure has suffered a “notable drop” in the month of October.
The ONS also brought out trade data that confirmed the widening of the UK’s trading deficit. This figure grew by more than was expected when it rose from £11.5 billion in September to close to £14.5 billion in October.

The Reasons for This Poor Performance

Analysts have pointed at a couple of main reasons why the UK economy has ground to a stand-still in recent months. The main factor is the presence of ongoing doubts over Brexit. The cloud of uncertainty that this caused is something that has hung over the country throughout the year.
This has been added to by the upcoming general elections. It has created a sense of doubt about the direction that the country will be moving in during the next few years.

Another issue that has held back industry is the weak global climate. Countries all over the planet have been struggling to grow their economies in the face of trade wars and low levels of consumer demand.
This global sluggishness has affected many businesses, with fears over debts being paid back leading to a rise in international debt collection concerns. The latest reports suggest that a breakthrough in the US-China trade war may be close, but other issues remain unresolved.

What Does the Future Hold?

It is expected that growth remains at a low level for what remains of 2019. However, economists hope that 2020 will see things improve in 2020 if the uncertainties around Brexit and the political future of the country disappear. 
A GDP growth rate of 1% is widely predicted for next year, on the basis that Brexit is carried out in an orderly manner. 

There is also the possibility that these poor numbers lead to the Bank of England interest rate being cut. This is something that becomes more likely if the election vote is inconclusive.