The UK economy grew more strongly than expected in February as ‘preBrexit’ stockpiling provided a boost to the monthly rate of economic growth. Official gross domestic product (GDP) data released by the Office for National Statistics (ONS) has revealed that the economy expanded by 0.2% in February. While this does represent a relatively modest growth rate by historic standards, the figure was significantly higher than most economists had predicted and has eased potential fears that the UK economy could be set to stall or even contract during the first quarter of the year. A key factor behind this stronger than anticipated performance, however, relates to manufacturers’ stockpiling activity. Although ONS does not collect specific data on this area, it did state that survey evidence suggests some manufacturers changed the timing of their activities as the UK’s original planned departure date for leaving the EU approached, in order to minimise any potential disruption to supply chains in the event of a no-deal Brexit. February’s strong GDP data, therefore, appears to reflect a rush by manufacturers
to meet orders from clients stockpiling essential items ahead of Brexit. This point was further reinforced by the latest Confederation of British Industry (CBI) quarterly survey which showed that, in the three months to April, British factories stockpiled at the fastest pace since records began in the 1950s. Meanwhile, IMF managing director Christine Lagarde has warned that further uncertainty surrounding the Brexit process will undoubtedly have a negative impact on the UK’s future growth prospects. The warning followed the release of the IMF’s latest economic assessment with the new forecast suggesting the UK economy will expand by 1.2% in 2019, down 0.3% from the organisation’s previous prediction published in January.