UK economy continues to grow but pace slackens off

24 Oct 14
The UK economy grew by 0.7% in the third quarter of the year, down slightly on the 0.9% recorded for the second quarter.

Preliminary estimates from the Office for National Statistics, published today, said output increased in all four main industrial groupings: 0.8% in construction; 0.7% on services; 0.5% in production; and 0.3% in agriculture.

Compared to Q3 2013, the gross domestic product was 3% higher. And compared to the pre-downturn peak of Q1 2008, GDP was 3.4% higher.

From the economic peak of early 2009 to the trough in Q2 2009, the economy shrank by 6%, the ONS said.

Commenting on Twitter, Chancellor George Osborne said the figures showed that ‘the UK is leading the pack in an increasingly uncertain global economy’. Growth in construction and manufacturing was ‘very encouraging’, he added.

But Geraint Johnes,director at Lancaster University’s Work Foundation, said ‘dramatic’ growth rates were unlikely to be sustained.

‘The preliminary GDP estimate for the third quarter shows a slight slowing of the annual growth rate from 3.2% to 3.0%. While this small change might not be worthy of much comment in isolation, there are other indicators that suggest that growth over the coming months may be somewhat slower than they were in the earlier part of 2014,’ he said.

‘The latest data on the production industries show that growth in that sector has stalled. Continued difficulties in the economies of major trading partners, particularly in Europe, along with the strength of the pound, make exports difficult. So while overall output should continue to grow over the foreseeable period, the dramatic growth that we have seen this year is unlikely to be sustained.’




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