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UK economic growth flatlined even before coronavirus hit country

Edmund Heaphy
Finance and news reporter
The sun sets on the City of London. (Photo by Chris Gorman/Getty Images)

UK economic growth came in at 0% in the final three months of 2019 according to final figures, meaning that the country’s economy flatlined even before the coronavirus crisis hit.

The Office for National Statistics (ONS) confirmed on Tuesday that the country’s gross domestic product (GDP) was flat in the final quarter of the year compared to the previous three months, unrevised from its first quarterly estimate.

Compared with the same quarter in 2018, the UK economy expanded by 1.1% in the final three months of the year, the ONS said.

READ MORE: Coronavirus 'will wipe 15% off UK GDP' in the next quarter

The data means that December’s general election failed to spark a quarterly rebound in the country’s economy, even though several closely watched surveys had pointed to an uptick in demand and business sentiment.

The ONS also confirmed on Tuesday that the UK economy grew by 1.4% overall in 2019, up from 1.3% in 2018, even as it revised growth in the first quarter of the year up to 0.7%.

Economic output fell by 0.2% in the second quarter of 2019, slightly lower than its previous estimate.

“Growth in services was offset by a drop in construction and yet another fall in manufacturing,” said Rob Kent-Smith of the ONS.

“Household spending also saw no growth in the last three months of the year while business investment continued its recent weak path, with a decline at the end of 2019,” he said.

Data from the quarter relates to the period before the first reported cases of coronavirus in the UK, and before the impact of even the earliest factory closures in China, which disrupted UK supply chains.

Growth in the first quarter of 2020 is expected to be dented by the pandemic, and the data from the first three months of the year will likely reflect the initial impact of social distancing measures and several days of the lockdown imposed by the government.

READ MORE: Coronavirus sends UK’s record jobs boom into reverse

But the true effects of the crisis are likely to be most evident in the second quarter of the year.

The Centre for Business and Economic Research suggested on Monday that the UK faces its deepest recession since the financial crisis as a result of the virus, with economic output likely to plummet by by 15% between the first and second quarters of 2020.

It would mark the steepest quarter-on-quarter decline since comparable records began in 1997.

Demand for many goods and services has plummeted as the UK has adopted measures to control the spread of the virus and gone into lockdown, with unprecedented restrictions on “non-essential” shops and travel.