Brexit related uncertainty is having a “direct and detrimental impact” on the UK’s economic output, business leaders said today.
Figures from the Office for National Statistics have stated that UK Gross Domestic Product (GDP) contracted by 0.2 per cent in the second quarter of 2019.
It is the first fall in GDP recorded since 2012.
Falls in production and construction outputs during Q2 have been marked as the cause for GDP contraction.
The services sector – which accounts for around 80 per cent of the UK’s economy – did however grow by 0.1 per cent.
Although the rate of growth was low, compared to the 0.4 per cent growth in the sector seen in the first three months of the year.
Paul Faulkner (pictured), chief executive of Greater Birmingham Chambers of Commerce, said: “Admittedly there are extenuating circumstances which account for today’s results – in particular, the threat of a global trade war, car manufacturers having brought forward their annual shutdowns and the fallout from the stockpiling that took place in March.
“Nevertheless, the results speak for themselves. Brexit related uncertainty is having a direct and detrimental impact on our output and there’s only so long that politicians can bury their heads in the sand and ignore the facts.
“If any further evidence is needed, look at the reaction of the financial markets after the publication of this morning’s data – the value of the pound fell once again as we face up to the prospect of entering a recessionary period.
“The data reflects what our members have been telling us for months. Our latest Quarterly Business Report revealed that export demand had slowed, recruitment levels were stagnant and investment in capex was the lowest we’ve seen since the midst of the global financial crisis.
“Anodyne statements and empty platitudes on the need to turbo charge the economy need to be replaced with decisive leadership – securing an orderly withdrawal from the European Union and cracking on with delivering key infrastructure projects such as HS2 in full would be a good start.”
Businesses are being urged by the GBCC to take steps to prepare for Brexit.
To find out how Brexit may impact your organisation, take the free Business Brexit Health Check here www.wmca.org.uk/brexithealthcheck