UK growth hits six-month low as Brexit looms - as it happened

The UK economy grew by 0.3% in the three months to November, the weakest rate in six months, dragged lower by a fall in car production

• Pound rises on Brexit delay speculation
• Jaguar Land Rover and Ford to cut thousands of jobs
• US inflation falls in December on lower petrol prices
• Flybe rescued by Virgin and Stobart in cut-price deal

3.05pm GMT

Before we close for the day, here's a quick summary of the main events:

The UK economy grew by 0.3% in the three months to November, which was the weakest in six months. Growth was held back by a shrinking British manufacturing sector, with car production bearing the brunt of the slump.

Related: UK GDP growth slows to 0.3% as manufacturing stalls

Related: Virgin Atlantic swoops on troubled Flybe with 2.2m bid

2.35pm GMT

US markets fell after the opening bell, as Donald Trump edges closer to declaring a national emergency to fund his long-promised border wall with Mexico and end the political impasse that has led to the partial shutdown of the government.

Related: Trump edges closer to declaring national emergency to fund border wall

2.31pm GMT

Over in Greece, the German chancellor Angela Merkel is continuing to win over Greek hearts as she pledged "heart felt support" for the country almost 10 years after its debt crisis began.

Helena Smith explains:

2.14pm GMT

The fall in US inflation reduces the urgency for further interest rate hikes by the Fed, according to Andrew Hunter at Capital Economics.

With real economic growth solid and the stock market continuing to rebound, we suspect that it's still too soon to assume that the Fed's tightening cycle is over.

But the continued stability of core inflation could give the Fed more room to pause, as officials assess the impact of the slowdown in global growth and tightening in financial conditions on the domestic economy. Regardless, we continue to expect that an economic slowdown later this year will force the Fed to start cutting rates again in 2020.

1.49pm GMT

Annual inflation in the US fell to 1.9% in December from 2.2% in November, the Labor Department said.

A 2.1% drop in petrol prices over the 12 months offset a 1.6% rise in food prices, itself driven by an increase in the cost of fresh fruit and vegetables.

BREAKING! US headline #inflation falls to 1.9% on oil prices, first reading below 2% since August 2017. Core inflation steady at 2.2%. pic.twitter.com/prQhfHvIkg

1.13pm GMT

Read our full story on this morning's GDP figures here:

Related: UK GDP growth slows to 0.3% as manufacturing stalls

12.54pm GMT

Professor Costas Milas of the University of Liverpool says today's GDP data won't deter the Bank of England from raising interest rates this year:

Although today's economic data confirms that our economy is slowing down, the slump is fully in line with Bank of England's most recent predictions.

With this in mind, we are still on target for the Bank of England policy rate rate to rise to 1% by the end of 2019 [from 0.75% now]. Unless, of course, Mrs May's Brexit deal is rejected during next week's Parliamentary vote which risks opening Pandora's (economic) box and bring into the picture interest rate cuts instead.

12.15pm GMT

Having briefly flirted above 7,000, the FTSE 100 is now back in the red as the earlier merriment appears to have evaporated.

The FTSE is down 19 points or 0.3% at 6,923.91.

11.59am GMT

Away from the UK, Italy could be heading into recession according to economists at the Dutch bank ING.

They say that poor industrial production data for November, combined with soft confidence numbers, significantly increase the chances of Italy entering a technical recession in the fourth quarter.

Industrial production data, just published by Istat, showed that the Italian economy shared the same difficulties as Germany and France in November.

Although a public holiday at the start of the month might have contributed to the worsening picture, we believe the impact is probably only minor.

11.42am GMT

The pound has been boosted this morning by mounting speculation that Brexit could be delayed (or cancelled altogether).

According to a report in the Evening Standard, unnamed "cabinet ministers" said a Brexit date of 29 March was looking increasingly unachievable.

A backlog of at least six essential Bills that must be passed before Britain leaves the European Union has left ministers convinced the timetable will be extended.

They include the much-delayed Immigration Bill.

HEDGE FUND MANAGER CRISPIN ODEY TELLS REUTERS HE IS NOW BETTING ON POUND TO RISE AS HE PREDICTS BREXIT WILL NOT HAPPEN

11.02am GMT

Labour has responded to the latest growth figures, blaming a slowdown on the government's "botched handling" of Brexit.

Peter Dowd, shadow chief secretary to the Treasury, says:

It's clear from these figures that the government's botched handling of Brexit is continuing to damage our economy.

The ONS has reported that manufacturing had suffered their longest period of monthly falls in output since the financial crisis.

10.56am GMT

Manufacturing was a clear weak spot in the UK economy in the three months to November, shrinking 0.8% compared with the previous three months.

As we saw yesterday when Jaguar Land Rover and Ford announced thousands of job cuts, the car industry in particularly has been hit hard and production was down 2.4% over the three-month period.

While the service sector has performed better than expected the same cannot be said for manufacturing with production falling again and ten out of thirteen sub-sectors reporting a contraction in the three months to November. Most significantly, manufacturing output has now fallen for the fifth consecutive month, the first time this has happened since the financial crisis.

In particular, coming on the back of yesterday's announcements there was yet more bad news for motor vehicles which contracted by 2.4% in the three-months to November. The sector, which is crucial for several manufacturing sub-sectors in the country, appears to be in a very weak spot and it would appear the knock-on effects are now having significant consequences for the supply chain.

10.26am GMT

Pablo Shah, economist at the Centre for Economics and Business Research, says UK growth is likely to remain weak in the coming months:

Today's figures show that the UK economy has now entered what is likely to be a prolonged spell of weak growth. Cebr forecasts that the UK economy will expand by 1.1% in 2019, which would make it the weakest year since the 2009 recession, as economic uncertainty continues to cripple sentiment among firms and households alike.

10.08am GMT

Economic growth slowed to 0.3% in the three months to November, from 0.4% in the three months to October.

9.39am GMT

The UK economy grew by 0.3% in the three months to November, down from 0.4% in the three months to October and the weakest in six months.

Growth was driven by the services sector, while manufacturing output fell, led a by a slump in car production.

Growth in the UK economy continued to slow in the three months to November 2018 after performing more strongly through the middle of the year. Accountancy and housebuilding again grew but a number of other areas were sluggish.

Manufacturing saw a steep decline, with car production and the often-erratic pharmaceutical industry both performing poorly.

9.31am GMT

Neil Wilson, analyst at Markets.com, says the FTSE's break through the 7,000 mark is significant:

FTSE 100 is testing 7,000 again, showing a firm bounce from the key test at 6,700 which it has survived. The area around 7,000 is the 38% retracement of the rally from the 2016 lows to the 2018 highs.

It's also an area where we saw a lot of choppiness last November and is likely to form a key resistance point. The indicators appear quite bullish with the index breaking free from downtrend resistance and through its 50-day moving average on the close yesterday, which has proved a very sticky area of resistance throughout the recent downtrend.

9.15am GMT

European investors have started the day with moderate cheer, with all major indices edging higher in early trading.

The FTSE is back above the 7,000 mark for the first time in 2019, up 57 points or 0.8%.

8.31am GMT

Struggling airline Flybe has recommended to shareholders a 2.2m takeover offer from a consortium led by Virgin Atlantic, which is part-owned by the billionaire Sir Richard Branson.

8.02am GMT

Economists polled by Reuters are expecting the ONS figures later this morning to show Britain's manufacturing sector grew by 0.3% in November.

But as we saw yesterday with Jaguar Land Rover and Ford axing thousands of jobs, car manufacturers in particular are struggling.

Concerns about a slowdown in the UK economy will focus on a different sector today with the release of the latest manufacturing and industrial production numbers for November. We've already seen some ugly numbers out from Germany and France this week raising concerns that Germany could fall into recession in Q4.

If the weak economic environment in Europe is any guide the UK could well cop some of the fallout from that, with the sharp decline in oil prices also weighing on the UK oil and gas sector.

Related: Jaguar Land Rover and Ford to axe thousands of jobs

7.50am GMT

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

UK growth figures at 9.30am will provide the latest insight into how the economy is faring as Brexit looms. It's not expected to be pretty, with City economists pencilling in growth of just 0.1% in November.