Brexit stockpiling gives sluggish UK economy a surprise lift

By Ivana Kottasová, CNN Business

London (CNN Business)The struggling UK economy is getting a boost from Brexit stockpiling.

UK GDP grew 0.3% in the three months to the end of February, the Office for National Statistics said Wednesday. Economists polled by Reuters were expecting an expansion of 0.2%.
Economists said the faster pace of growth was partly due to manufacturing businesses stockpiling materials and parts that would be harder to acquire if Britain crashes out of the European Union.
The Office for National Statistics said that it had seen evidence that manufacturers were engaged in stockpiling as the original Brexit deadline approached.
UK politicians have still not agreed a deal that would prevent a disorderly Brexit, which could lead to lengthy delays at the country’s borders. The latest deadline to avoid leaving the European Union without a deal is Friday.

Economists expect there was even more stockpiling last month ahead of the original Brexit date of March 29.
Howard Archer, chief economic adviser to the EY ITEM Club, pointed to a survey that showed manufacturing activity spiked to its highest level in 13 months in March.
“It got a substantial lift from producers and their clients stockpiling inputs and finished products at a record rate to guarantee their supplies in case of a disruptive Brexit,” he said.
Some companies, including the drugmakers Sanofi (GCVRZ) and Novartis (NVS), said they would stockpile treatments in the United Kingdom ahead of Brexit. Select food suppliers and supermarkets have said the same.
Prime Minister Theresa May is traveling to Brussels on Wednesday to ask the European Union for yet another Brexit delay.

The UK economy has suffered because of prolonged uncertainty over Brexit.
A weak housing market, slumping autos production, declining investment and downbeat executives all suggest that nearly three years of confusion over Brexit is causing the economy to stagnate.
“By normal standards, a 0.3% expansion would be considered quite feeble,” said Ruth Gregory, senior UK economist at Capital Economics.