Investing.com - The rate of economic growth in the U.K. slowed as expected in February, while markets awaited a further extension of the deadline for the U.K. to leave the European Union.
Gross domestic product grew 0.2% in February, the Office for National Statistics reported on Wednesday, slowing from the 0.5% expansion seen in January but in line with consensus.
“Services again drove the economy, with a continued strong performance in IT,” ONS Head of GDP Rob Kent-Smith said in the report. “Manufacturing also continued to recover after weakness at the end of last year with the often-erratic pharmaceutical industry, chemicals and alcohol performing well in recent months.”
In a separate report, manufacturing production grew 0.9% in February, while industrial production increased 0.6%.
With two days to go until the official deadline for the U.K.’s departure from the EU, an extension to that deadline is widely expected to be reached at an emergency EU summit later on Wednesday.
The terms, however, still remain uncertain as U.K. Prime Minister Theresa May failed to gain approval of a short delay until June 30. European Council President Donald Tusk has suggested a 12-month delay, but other leaders, notably French President Emmanuel Macron, have insisted on restrictions to its rights as a member during that time. Such conditions would make it even harder for May to keep her rebellious party in line.
The International Monetary Fund cut its forecasts for world growth on Tuesday and gave a specific warning over not reaching an agreement over Brexit.
“A no-deal Brexit that severely disrupts supply chains and raises trade costs could potentially have large and long-lasting negative impacts on the economies of the United Kingdom and the European Union,” the IMF said in its World Economic Outlook..
For the U.K. separately, the IMF predicted that a chaotic departure could result in two years of recession.