Recession fears recede as booming film industry boosts economy

Marco Green
October 10, 2019

The Office for National Statistics (ONS) said economic growth picked up in August to 0.3% on a three-month basis - which is seen as less volatile than monthly data.

"Britain's economy now looks set to post some growth in the third quarter", Fuller said.

"But even so, there's very little to cheer about in the United Kingdom economy at the moment", Smith said.

The growth figures are being watched closely for signs of recession - defined as two consecutive quarters of contraction - after the economy shrank in the second quarter for the first time since 2012.

Speaking after unveiling the new polymer £20 note at an event in Margate, Mr Carney said: "The underlying pace of the economy is growing, but it's just very modest".

That growth was driven by services, production and public sector growth, offsetting the fall in construction.

But a 0.2% decline in economic output in the three months to the end of June fanned worries that the United Kingdom was on the cusp of a recession - which is defined as two consecutive quarters of falling GDP.

The pound was 0.2% higher at 1.223 United States dollars after the data, but continued to weaken against the euro, down 0.3% to 1.11 euros.

Services, the largest part of the economy, saw output climb 0.4pc over the three.

But September IHS Markit purchasing managers' index data released last week for the private sector pointed to a 0.1 percent contraction in the third quarter, with businesses reporting that foreign customers were staying away before Brexit.

He said: "The economy looks to have had a very challenging and hard September, and there is a very real possibility GDP could have contracted over the month, despite some stockbuilding occurring ahead of the October 31 Brexit date".

Prime Minister Boris Johnson has promised to take the United Kingdom out of the European Union by October 31, without a transition period if necessary - despite parliament telling him to delay Brexit again if he can not negotiate a fresh deal.

"Services provided [the] majority of the growth over the three months, with production and manufacturing falling back", said Rob Kent-Smith, head of GDP at the ONS.

August trade data also released on Thursday showed the UK's goods trade deficit widened slightly to 9.8 billion pounds ($12.0bn) from 9.6 billion pounds ($11.76bn) in July, versus Reuters poll forecasts of 10.0 billion pounds ($12.25bn).

Other reports by Click Lancashire

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