United Kingdom economy beats expectations with 0.4% growth in third quarter

Marco Green
October 25, 2017

United Kingdom growth gained a little momentum in the third quarter thanks to strong performances in the services sectors and a return to growth for manufacturing, official data revealed on Wednesday.

THE GOVERNMENT got a Budget boost today as economic growth sped up thanks to booming factories and shops.

Gross domestic product grew 0.4 percent sequentially in three months ended September.

The largest contributor to growth in services was the business services and finance sector, which grew by 0.6%, while the positive contribution from production (up 1% in the quarter) was attributed to strength in the auto manufacturing output in July, which increased by 3.8%. Services, led by increases in IT, motor trades and retail, continued to drive GDP growth.

The economy grew by 0.3 per cent per head between April and June as growth outpaced the rising population.

The figures will also be a small boost for under-pressure finance minister Philip Hammond ahead of his annual budget on November 22, who has limited room for maneuver because of Britain's poor productivity performance.

The official figures show the economy growing at a slower rate than in 2016, with weaker consumer spending due to higher inflation and sluggish earnings growth for squeezed households. Industrial output expanded 1.0 percent, its fastest growth in more than a year. It fell 0.7 percent.

However, the construction industry, often seen as a bellwether for the broader economy, contracted for the second quarter in a row.

Other reports by Click Lancashire

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