The UK lost economic momentum in the three months to April amid a “dramatic” fall in car production resulting from temporary shutdowns planned to anticipate Brexit.
Growth slowed to 0.3% in the three months to April, down from the 0.5% registered between January and March, according to figures from the Office for National Statistics out Monday.
The economy contracted sharply — by 0.4% in April — as a boost from Brexit-related stockpiling came to an end, according to the figures.
“GDP growth showed some weakening across the latest 3 months, with the economy shrinking in the month of April mainly due to a dramatic fall in car production, with uncertainty ahead of the UK.’s original EU departure date leading to planned shutdowns,” said Rob Kent-Smith, head of GDP measuring at the statistics authority, in a statement.
Carmakers adapted their production plans ahead of the March 29 Brexit date by moving summer shutdowns up by a few months, in an attempt to cushion against the impact of a no-deal exit.
“There was also widespread weakness across manufacturing in April, as the boost from the early completion of orders ahead of the UK’s original EU departure date has faded,” said Kent-Smith.
Elizabeth Martins, a senior economist at HSBC bank, said the weakness seems to be further spread than manufacturing.
“Manufacturing fell back — taking out all of the gains of the last three months and then some — but services output was flat and construction fell too. So perhaps not everything can be explained by the reversal of stockpiling,” she said.