The UK economy shrank by 0.4% in April after a “dramatic” decline in car production, according to the Office for National Statistics (ONS).
Figures released by the Society for Motor Manufacturers and Traders (SMMT) showed that production of new cars fell by 45% in April, as factories proceeded with shutdowns in preparation for Brexit.
Earlier this month, a closely watched survey revealed that the UK’s manufacturing sector shrank for the first time in three years in April.
April’s contraction means the economy grew by just 0.3% over a three month period, which is often regarded as the more reliable indicator of economic performance.
ONS statistician Rob Kent-Smith said: “Growth showed some weakening across the latest three 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.
“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.”
Speaking to the BBC, Ruth Gregory, senior UK economist at Capital Economics, said: “With the Brexit paralysis and a slowing global economy taking its toll, we doubt GDP will grow by much more than 1.5% or so in 2019 as a whole and expect interest rates to remain on hold until the middle of next year.”