What's going on?
According to data out on Monday, the British economy skived off the last quarter of 2018: it grew just 0.2%.
What does this mean?
In December, the UK economy actually shrank – a big factor in its lower-than-expected growth across the full quarter. For 2018 as a whole, 1.4% growth was the UK’s lowest since 2012 – although 2019 is predicted to be even worse.
Everybody’s bruising from a global slowdown and the US-China trade war – but the UK also has Brexit to contend with. Concern about the lack of a divorce agreement with the European Union was likely behind UK manufacturing declining 0.9% last quarter, although the crucial services sector squeaked growth of 0.4%.
Why should I care?
For markets: Investment in Britain is falling fast.
The pound fell against the US dollar on Monday as investors moved money out of sterling in search of greater growth across the Atlantic. Last quarter, UK business investment saw its biggest drop since early 2010; it’s now fallen for four quarters in a row. And official data out in September suggested businesses had invested $28 billion less in Britain since the Brexit vote. With several more high-profile names recently announcing plans to move operations overseas, that number may soon be revised higher.
For you personally: Less money is less money.
UK consumer spending fell in December, and confidence is anything but – the average British household is around $2,000 worse off than before the Brexit vote, with record levels of debt (tweet this). For those in some parts of the sceptred isle, wages are worth up to a third less than a decade ago: while paychecks are bigger, you might not be able to buy as much with them. And recently announced slower UK interest rate rises also mean less cash earned on any money that is sitting in the bank. Still – chin up, eh?