UK economy slows as global worries, Brexit weighs on factories

Britain’s economy has slowed after the June 2016 Brexit vote. (AFP)
Updated 11 January 2019
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UK economy slows as global worries, Brexit weighs on factories

  • Gross domestic product was 0.3 percent higher than in the previous three-month period
  • Prime Minister Theresa May risks losing a parliamentary vote on Tuesday on the deal she has agreed with the EU

LONDON: Britain’s economy grew at its weakest pace in half a year in the three months to November as factories suffered from tough global trade conditions and the approach of Brexit, official data showed on Friday.
Gross domestic product was 0.3 percent higher than in the previous three-month period, down from growth of 0.4 percent in the three months to October and matching the consensus of a Reuters poll of economists.
Manufacturers suffered their longest period of monthly declines in output since the financial crisis, hurt by weaker overseas demand, the Office for National Statistics said.
Looking at November alone, industrial output dropped 1.5 percent on the year — the biggest fall since August 2013.
Worries about the global economy have been mounting due to concerns about a trade war between the United States and China.
Figures from Germany and France earlier this week also showed falling industrial output.
“There may well be a common theme which is hurting the factory sector throughout Europe, for example changes in the auto industry,” Investec chief economist Philip Shaw said, adding that Brexit worries were also weighing on investment.
Carmakers across Europe have suffered from a fall in demand for diesel vehicles due to pollution concerns.
Sterling and British government bonds were little changed by Friday’s figures.
The figures fit with business and consumer surveys that suggest the economy is slowing sharply after robust growth of 0.6 percent in the third quarter of the year, reflecting growing uncertainty ahead of Brexit, as well as global jitters.
Britain is due to leave the EU on March 29 and whether businesses will still be able to trade without disruption to cross-border supply chains remains unclear.
Prime Minister Theresa May risks losing a parliamentary vote on Tuesday on the deal she has agreed with the EU.
Defeat would leave open the prospect of Britain leaving the EU without any transitional arrangements to smooth the economic shock.
Compared with a year earlier, Britain’s economy was 1.4 percent larger. In November alone, it expanded 0.2 percent, compared with forecasts for a rise of 0.1 percent.
The Bank of England says the economy is likely to have grown around 0.2 percent over the fourth quarter of 2018.
Closely watched purchasing managers’ surveys have pointed to fourth-quarter growth of around 0.1 percent in Britain, according to data firm IHS Markit which compiles the surveys.
Britain’s economy slowed after the June 2016 Brexit vote, its growth rate slipping from top spot among the Group of Seven group of rich nations to mid-table or lower.
An unusually warm summer and the soccer World Cup spurred a pick-up in mid-2018 but retail sales data suggest consumers reined in spending late last year.
Britain’s services sector grew by 0.3 percent over the three months to November, while industrial output dropped by 0.8 percent, the biggest decline since May 2017.
Separate figures showed Britain’s goods trade deficit widened unexpectedly in November to £12 billion ($15.3 billion) from £11.9 billion, worsened by the highest oil imports since September 2014.


China’s Huawei books record sales in its smartphone business

Updated 24 January 2019
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China’s Huawei books record sales in its smartphone business

  • Huawei last month flagged that total revenue in 2018 rose 21 percent to $109 billion without providing a breakdown of segment performance
  • Some countries such as the United States and its allies, including Australia and New Zealand, have restricted Huawei’s access to their markets

BEIJING/HONG KONG: China’s Huawei Technologies Co. Ltd. said on Thursday its consumer business sales exceeded a record $52 billion in 2018, on strong demand for its premium smartphones, even as it continued to face heightened global scrutiny of its activities.
The jump of around 50 percent in the technology giant’s consumer business revenue saw that unit replace its carrier business as its largest segment by sales, Richard Yu, the head of the consumer division, said in Beijing.
Huawei last month flagged that total revenue in 2018 rose 21 percent to $109 billion without providing a breakdown of segment performance.
Huawei on Thursday also unveiled its first 5G base station chipset called Tiangang as well as its 5G modem Balong 5000, which it described as the most powerful 5G modem in the world.
Yu said it was the world’s first 5G modem that fully supports both Non-Standalone (NSA) and Standalone (SA) 5G network architecture.
The firm has been using its chipsets in its high-end phones and server products, though it has said it has no intention to become a standalone semiconductor vendor that competes against the likes of Intel Corp. and Qualcomm Inc.
Huawei, the world’s biggest producer of telecommunications equipment, has been facing intense scrutiny in the past year over its relationship with China’s government and US-led allegations that its devices could be used by Beijing for spying. The firm has repeatedly denied the accusations.
Some countries such as the United States and its allies, including Australia and New Zealand, have restricted Huawei’s access to their markets.
The firm’s finance chief Sabrina Meng Wanzhou, also daughter of its founder, was arrested in Canada last month at the behest of the United States.
She has been released on bail but is still in Canada as the United States pursues her extradition on allegations she defrauded banks with Iran-related sanctions. Huawei has denied wrongdoing.