UK economy dodges recession, but annual growth slowest since 2010

LONDON (Reuters): Britain’s economy grew at its slowest annual pace in nearly a decade during the three months to September as the global slowdown and Brexit worries hit manufacturing and business investment, official figures showed last week.

While the economy dodged outright recession, the rebound in quarterly growth was smaller than expected.

Output fell in August and September when Britain looked at risk of leaving the European Union without a transition deal.

A month before an early election, Finance Minister Sajid Javid hailed what he called “solid” growth figures, a view challenged by the Opposition Labour Party.

“The fact that the Government will be celebrating 0.1% growth in the last six months is a sign of how low their hopes and expectations for our economy are,” Labour’s top finance official John McDonnell said. Economists said ongoing political uncertainty and a weak global backdrop could prompt the Bank of England to cut interest rates next year, even if Prime Minister Boris Johnson passes his Brexit deal before a new 31 January deadline.

“Narrowly avoiding a recession is nothing to celebrate,” said Institute of Directors economist Tej Parikh, “The UK economy has been in stop-start mode all year, with growth punctuated by the various Brexit deadlines.”

Annual gross domestic product growth fell to 1.0% in the third quarter from 1.3% in the April-June period, the Office for National Statistics said, its lowest since early 2010