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UK economy 'limped through' end of 2019, survey shows

Oscar Williams-Grut
·Senior City Correspondent, Yahoo Finance UK
LONDON, ENGLAND - DECEMBER 26: Crowds of people shop during the Oxford Street Boxing Day Sales on December 26, 2019 in London, England. (Photo by Hollie Adams/Getty Images)
Crowds of people shop during the Oxford Street Boxing Day Sales on December 26, 2019 in London, England. Photo: Hollie Adams/Getty Images

The UK economy stagnated in the final three months of 2019, according to a wide-ranging survey of private sector activity.

The British Chamber of Commerce (BCC) said Thursday its quarterly survey of members found “protracted weakness across most indicators of economic health” during the final three months of the year.

“The UK economy limped through the final quarter of 2019,” said Suren Thiru, Head of Economics at the BCC.

“The fourth quarter was characterised by a broad-based slowdown in the dominant services sector with all key indicators weakening in the quarter, amid sluggish household expenditure and crippling cost pressures.”

The service sector — which covers everything from consultancy to fast food restaurants — represents around 80% of the UK’s economy, meaning any slowdown is worrying for overall economic health.

READ MORE: UK employment hits record high despite alarm bells over UK economy

Thiru said the BCC’s findings suggest UK GDP growth will be “downbeat” in the fourth quarter of 2019. GDP grew by just 0.4% in the third quarter of 2019.

Dr Adam Marshall, Director General of the BCC, called on the government to spend support businesses by spending cash.

“The government must use its newfound majority to take big decisions to stimulate growth,” Dr Marshall said.

“If ministers take action to reduce up-front costs, move key infrastructure projects forward, and to help businesses on training, they’ll be rewarded with increased investment.”

The BCC is one of Britain’s biggest business lobbying groups, representing tens of thousands of businesses and around 6m employees.

Separately on Thursday, research consultancy Pantheon Macroeconomics said the UK economy remains stagnant but said risks for a serious crash were low.

“The economy is entering the 2020s with little momentum, but also with few overt structural weaknesses,” Samuel Tombs, chief UK economist at Pantheon, wrote in a note sent to clients.

“We look for year-over-year GDP growth of 1.2% in both 2020 and 2021, and see the odds of a recession this year as low as 15%.”

READ MORE: The areas of Britain where people earn the most