United Kingdom economic growth cooled as manufacturing contracted for a third quarter and construction shrank the most since 2012, a sign that Britain may be falling prey to global headwinds. “But global risks mean we go on with tough decisions to live within our means”.
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“The cause for concern here is that the business surveys indicate that the slowdown is spreading from the struggling manufacturing sector to the far larger services economy, meaning growth looks set to slow further in the fourth quarter”, he said. “The sectoral pattern is mixed”. The latest construction output data showed output plunging by over 4% mom in August and if it just holds at that level in September would be down 2.6% on the quarter.
Within the production sector – which recorded growth of 0.3 per cent – manufacturing output fell by 0.3 per cent but the ONS said this was offset by a 2.4 per cent increase in mining and quarrying and a 1.2 per cent increase in water and waste management.
The data released Tuesday is a preliminary estimate of GDP, which can change as more data become available, “but these revisions are typically small between the preliminary and third estimates of GDP”, according to ONS.
However, construction output tumbled 2.2 percent.
Compared with a year ago, the economy expanded by 2.3pc, against expectations of 2.4pc. On a three-month basis, services grew 0.9 percent, the most since December. Sterling could come under pressure this morning especially if the GDP number is lower than expected.
Growth of 0.5% probably pushes back the timing of the first interest-rate rise since 2007.
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A few economic surveys show the slowdown is continuing in the current quarter.
