Brexit has long cast dark clouds over the future of the UK.
London - Annual growth in June alone weakest since August 2013 at 1%.
Published: Sat 10 Aug 2019, 9:42 PM
The Office for National Statistics noted there was "increased volatility around the UK's original planned exit date from the European Union in late March".
"Manufacturing output fell back after a strong start to the year, with production brought forward ahead of the UK's original departure date from the EU," ONS statistician Rob Kent Smith said.
Annual growth in June alone was the weakest since August 2013 at 1 per cent.
Companies have stopped stockpiling as much. Many car companies also brought forward their annual maintenance shutdowns to April from later in the year to cushion the potential blow from Britain leaving the EU without a deal on March 29.
It was largely the combination of these Brexit-related developments that contributed to a sharp 1.4 per cent quarterly decline in the output of production industries.
The fact that the overall economy performed worse than anticipated is likely to increase concern about Brexit's corrosive effect on the economy. Business investment, which has been historically weak since the country voted in June 2016 to leave the EU, weakened further in the second quarter, contracting by 0.5 per cent.
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"Brexit uncertainty, and to a lesser extent, weaker global demand, has reduced firms' appetites to expand," said James Smith, an economist at ING bank. "Meanwhile, contingency planning activities for a no-deal Brexit are costly and often resource-intensive, reducing scope to lift capital spending. We expect this trend to continue for the rest of the year."
Defiance
Britain's finance minister, however, said on Friday he wanted to clinch a sensible Brexit deal with the European Union but if that was not possible then he was not frightened by a no-deal exit.
"If it comes to no deal, it's not anything that I'm frightened of, I'm not worried about, I think we will be ready for it, we will get through it, and we will come out stronger and even more resilient," Sajid Javid told Sky.
He said Britain wanted to get a "sensible" Brexit deal but it was right to prepare for a no-deal divorce from the European Union.
The Bank of England last week predicted that growth will pick up to a quarterly rate of 0.3 per cent during the current quarter, and that growth for the year as a whole will drop to 1.3 per cent.
But it also warned of a 1-in-3 chance that output in annual terms will contract in the coming quarters, even if Britain leaves the EU on reasonable terms.
Also on Friday, the United States overtook Germany as the biggest supplier of imports into Britain for the first time on record in the last financial year.