UK plc grew by 0.6% in the third quarter helped by World Cup fever
UK plc grew by 0.6% in the third quarter as World Cup fever helped economy expand at fastest rate for nearly two years
- The UK economy grew by 0.6 per cent in the third quarter, official figures show
- The rate is fastest since the last quarter of 2016 and was helped by World Cup
- The figures suggest that the boost tailed off towards the end of the summer
UK plc grew by 0.6 per cent during the third quarter as the country was gripped by World Cup fever.
The economy expanded by the fastest rate for nearly two years, driven by strong retail sales during the football tournament and a recovery in construction.
Chancellor Philip Hammond said the figures were proof of Britain’s ‘underlying strength’.
But the latest official figures also suggest the boost has tailed off, with growth in August and September both flat.
The Office for National Statistics (ONS) said that the figure represents the fastest quarterly growth since the final quarter of 2016
Office for National Statistics (ONS) spokesman Rob Kent-Smith said: ‘The economy saw a strong summer, although longer term economic growth remained subdued.
‘There are some signs of weakness in September with slowing retail sales and a fall back in domestic car purchases.
‘However, car manufacture for export grew across the quarter, boosting factory output.’
Growth in construction and manufacturing output picked up in the third quarter following a weak start to the year, when building projects were delayed by adverse weather conditions.
Output in the construction industry was 2.1 per cent higher in the period, the fastest increase since the first quarter of 2017.
May holds crunch talks with Macron with Brexit deal on knife…
EU ‘demands right to keep fishing in British waters’ as…
Share this article
Meanwhile, output from the services industries, which include retail, eased to 0.4 per cent compared to 0.6 per cent in the second quarter.
The strength in retail seen earlier in the summer continued into the beginning of the third quarter as consumers snapped up food and drink amid the hot weather and the World Cup.
Retail growth slowed to 1.1 per cent in the third quarter, following a 2 per cent rise in the previous period.
Motor trade services fell by 1.9 per cent, the weakest quarterly growth rate since the final quarter of 2012.
But car manufacturing increased, helping to improve the UK’s trade balance.
The total trade deficit narrowed by £3.2billion to £2.9billion. Cars had the biggest impact on the balance of goods imports and exports due to a £1billion rise in non-EU exports and a £1.7billion fall in EU imports.
Net trade made the largest positive contribution to GDP growth in the third quarter.
Growth figures for the latest quarter meet the expectations of economists as well as the Bank of England’s most recent predictions.
The Bank, which last week held interest rates steady, forecast 0.6 per cent GDP growth for the third quarter.
Chancellor Philip Hammond, pictured on a visit to a brewery in Chiswick today, said the figures were proof of Britain’s ‘underlying strength’
It then expects growth to pare back to 0.3 per cent in the fourth quarter before steadying at 0.4 per cent thereafter. European Commission forecasts released on Thursday show the UK heading for the bottom of the EU growth league in 2019, under-performing every other member state except Italy, which is tied for last place.
The UK is expected to post 1.2 per cent growth next year, compared with the fastest growing country, Malta, which is projected to grow by 4.9 per cent.
This year GDP growth is seen at 1.3 per cent, which will make the UK the third slowest-growing EU member.
On a visit to a brewery in Chiswick today, Mr Hammond, said: “Today’s positive growth of 0.6 per cent is proof of the underlying strength in our economy.
We are building an economy that works for everyone with 3.3 million more people in work, lower unemployment in every part of the country, and wages rising at their fastest pace in almost a decade.
‘Now our focus is on locking in this progress and ensuring people’s wages can continue to rise.’
Source: Read Full Article