Brexit ‘already causing serious and lasting damage to our economy’ as it contracts by 0.4%
- Credit: Empics Entertainment
Newly published data shows Brexit is already causing serious economic damage, with the UK economy shrinking by 0.4% in April.
Gross domestic product (GDP) was up by 0.3% in the three months to April, according to the Office for National Statistics (ONS), but it marked a slowdown on the rolling three-month level for January to March, when growth was at 0.5% thanks to the highest quarterly pick-up in manufacturing since the 1980s.
The pound weakened against the US dollar following the disappointing figures, dropping 0.4%.
On a month-to-month basis, GDP contracted by 0.4% in April, faster than the 0.1% decline expected by economists.
This was due to a drop in car manufacturing after several automobile plants went ahead with planned shutdowns, which had originally been scheduled to coincide with the immediate aftermath of Brexit.
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Although the production sector increased by 0.7% in the three months to April, monthly growth slumped by 2.7%.
Transport equipment was the biggest drag, contracting by 13.4% in April.
Motor vehicle production specifically saw a significant decline of 24%.
Rob Kent-Smith, the ONS's head of GDP, said: "GDP 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."
Wes Streeting MP, member of the Treasury Committee and leading supporter of the People's Vote campaign, said: "Brexit is already causing serious and lasting harm to our economy. News that the economy contracted in April shows the seriousness of the crisis and the extremely high stakes for jobs, investment and public services.
"British industry is feeling the strain, with British steel and car manufacturing on the brink. And the threat of a destructive no deal now hangs over every decision facing businesses small and large across the country. They know that WTO terms are the worst trading terms in the world and that No Deal threatens a new economic crisis.
"Now we know the real costs of Brexit, the public must be allowed back into this process. Forcing no deal - for which there is no mandate - on the country is not a solution. And nor is it a solution to run down the clock with fruitless attempts at renegotiation of Theresa May's Brexit deal.
"The only way to deliver a stable and lasting settlement, and to give businesses and workers the certainty they need, is through a People's Vote."
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