The UK has seen the lowest GDP growth since 2012

The British economy has grown in November at its slowest annual rate in the last seven years after the industrial sector registered a sharp decline this month. Political uncertainty loomed over British business and consumers as the country was due to leave the European Union on October 31st. Parliament then called for a postponement of the date for final Brexit, and Prime Minister Boris Johnson called early elections.

Monday’s official figures show that the UK economy grew by just 0.6% year-on-year in November. Thus, the economy of the country marks its slowest growth rate since June 2012. By contrast, in October the UK registered a 1.0% GDP growth.

On a monthly basis in November, British GDP contracted by 0.3%, which is the largest drop since April, the National Statistical Office reported.

“Overall, the economy has grown slightly over the last 3 months, with construction growth offset by a weakening in the services sector and another slump in the industry”, said Rob Kent-Smith of the National Statistical Office.

The construction sector saw a significant 1.9% year-on-year increase in productivity in November compared to a 2.2% decline reported in October. The services sector reports a slight increase of 0.1%, while the industry sector shrinks significantly by 1.7% yoy.

The reporting period also covers early elections. Candidates’ election campaigns were then concentrated on Brexit plans rather than on the country’s future economic development. Boris Johnson won an unexpectedly large majority in the December 12 election. Immediately afterward, private sector business surveys signaled a recovery in sentiment.

The new parliament approved Johnson’s plans to remove Britain from the European Union on January 31st. This date will set off an 11-month transitional period during which the prime minister must negotiate a long-term trade deal with the EU.

European Commission President Ursula von der Leyen called the timetable “impossible” during a meeting with Johnson last week. The British prime minister, for his part, rejected the possibility of extending the transition period.

In November, the Bank of England predicted that the economy would achieve very limited quarterly growth in the fourth quarter before recovering in 2020. This forecast suggests progress in EU trade talks and a reduction in trade tensions between the US and China.

Last week, Central Bank Governor Mark Carney said that if the institution’s projections turned out to be too optimistic, interest rates might have to be cut further.