UK economy nearing zero growth amid Brexit standoff
A major political standoff over Britain’s withdrawal from the European Union has caused the economy to stagnate as business groups and industries report almost zero growth for the first three months of this year.
The British Chambers of Commerce (BCC) released the results of the its latest survey into business activity in the United Kingdom, saying growth in the country’s economy has “nearly ground to a halt” due to Brexit anxiety and a slowdown in global growth.
BCC’s director general Adam Marshall warned that businesses were “hitting the brakes” due to the ongoing political standoff in the parliament where no one has been able to come up with solution on how Britain should deliver on the results of the 2016 Brexit referendum.
“For too long Brexit tunnel-vision has distracted government from fixing the fundamentals to support growth here in the UK,” said Marshall.
The BCC research covered business activity over the first three months of this year for more than 7,000 groups and firms employing around a million people.
It said the services sector saw no growth in exports in the period, its weakest level since 2009. The study also showed that fewer manufacturers reported an increase in sales this year compared to previous periods.
The study said the decline in UK economic growth was due to new regulation, including compliance with new tax rules, rises in business rates and changes to employers' pensions contribution, factors that have largely been left overlooked by the government due to the ongoing row on Brexit.
The UK government has until April 12 to either ratify a Brexit agreement in the parliament or face options like no-deal Brexit or a long extension to EU membership.
Official government estimates suggest the UK economy could shrink up to 10 percent if it fails to clinch an agreement with the EU on the terms of its withdrawal from the bloc.
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