Telegraph
Some figures are more alarming than others. A 24pc drop in any sector of the economy is likely to provoke concern, particularly if it follows headlines about thousands of job losses.
April's painful decline of almost a quarter in car production compared with March - one of the biggest contractions recorded by the Office for National Statistics in any sector - follows Ford's decision to close its Bridgend engine plant that was announced last week.
Some argue that Brexit is to blame for the UK car sector's decline, while others point to the wider decline of the industry worldwide amid growing US-China trade tensions. The reality is likely to be a combination of both - along with some scheduled shutdowns.
The economy contracted by 0.4pc in April, according to official data, largely driven by stagnant services growth and a 3.9pc fall in manufacturing - the worst decline for factories since 2002. This marks an “awful quarter”, says Samuel Tombs of Pantheon Macroeconomics.
It’s the worst monthly performance for the UK in three years. Averaged over three months, the picture is less bleak, however: 0.3pc growth in the three months to April, down from 0.5pc for the same period to March.
The fall in factory activity came after stockpiling by companies scared of disruption at UK ports and sharp currency fluctuations as a result of leaving the EU without a deal on 31 March. That spike flattered the first quarter of the year, leaving the UK facing a Brexit “hangover”, according to both Capital Economics and KPMG.
Finding the wood for the trees in the volatile measure of monthly GDP is difficult. What is clear, however, is that there’s a yo-yo effect.
Andrew Goodwin of Oxford Economics thinks that beneath the “noise” of building up to and then unwinding from Brexit deadlines, the UK economy is relatively resilient.
With billions promised for the NHS, adjustments to the 40pc tax rate to account for inflation, and growth in real wages, there are reasons to be cheerful. These actions should boost growth, Goodwin says.
But there’s a caveat: only if the Brexit distortions finally stop. A smooth transition and certainty for businesses would see the benefits of this fiscal easing realised. If anxiety and uncertainty over the leaving date, and the nature of the exit terms persists, these efforts will count for little.
The world’s most influential observers of the global economy - the International Monetary Fund, the World Bank, the OECD - have forecast sharp slowing of global trade volumes. However, the impact of this is yet has largely not yet hit the UK economy, according to Goodwin and others.
Brexit, not the trade war, is causing this “bumpy ride”, Goodwin says.
Whether companies decide to stockpile once again before the new Brexit cliff-edge of 31 October will determine whether the manufacturing sector gets back on track.
Yet even if stockpiling fever does take hold again, Tombs says markets are "overreacting" with a 30pc expectation that an interest rate cut will be needed to boost growth.
