Gross domestic product (GDP) – the combined value of all the goods and services produced in the economy – expanded by 0.5 percent between July and September, the Office for National Statistics said in an initial estimate.
Advertisement
However, UK GDP is still 2.3% higher compared with the same quarter a year ago.
Year on year, the economy grew 2.3 percent, the lowest rate of growth since the third quarter of 2013.
“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”, Chris Williamson, chief economist at Markit, said. Market consensus is now that the MPC will put off increasing the interest rate until the second quarter of 2016. But the U.K.’s reliance on the services sector for growth is disconcerting.
The United Kingdom economy’s growth slowed in the third quarter of the year, weighed down by the performance of the construction and manufacturing sectors.
Many analysts also fear the UK Treasury’s promises to balance the books by slashing government spending could lead to a more pronounced slowdown in growth in the following months. Yesterday’s CBI industrial trends survey showed manufacturing production fell in the quarter to October – the first fall in two years.
According to ONS data, output increased in three main sectors – services (0.7 percent), production (0.3 percent) and agriculture (0.5 percent).
Meanwhile, the Bank of England (BoE) might postpone its hike in base interest rates from early 2016 to a later date.
Mr Morton also questioned the value of the “forward guidance” provided since Bank of England governor Mark Carney took charge of the body, due to the “appalling” accuracy of the Bank’s predictions on rate rises.
Advertisement
Chancellor George Osborne said the United Kingdom continued to outperform other major economies but that “global risks mean we go on with tough decisions to live within our means”. It then recovered to $1.5325, still down 0.2 percent on the day. “We are still seeing a “Strowl of the Shoppers” more than a ‘March of the Makers”. “Additionally, the recent tax changes announced in the March Budget may have been contributing factors to the growth in mining and quarrying in the last 2 quarters”, ONS said.
