UK GDP: Britain's economy grew by 0.4% in the last quarter

Posted October 27, 2017

The industry added 0.05 percentage points to GDP growth of 0.4% between July and September, according to figures published today by the Office for National Statistics (ONS).

This beat economists' forecasts for a 0.3% rise, and was largely thanks to growth in the business services and finance sector, which expanded by 0.6% in the three months to September.

"Following recent hawkish comments from the MPC, markets were already regarding a return to 0.5% as a near-certainty", he said. The services sector grew by a more underwhelming 1.5pc on the year.

Sterling shot up following the release, rising more than 0.3% against both the USA dollar and the euro.

On an annual basis, construction output is up 2.8pc and manufacturing 2.7pc.

'While GDP growth in Q3 was a slight uptick on the previous quarter, the UK's combined economic growth performance over the first nine months of 2017 was still the weakest since late 2012, and indicates that the United Kingdom economy remains locked onto a low growth trajectory.

United Kingdom shares edged lower on Wednesday as a pullback in metals prices weighed on miners and better-than-expected GDP data increased the likelihood that the Bank of England will raise interest rates on November 2.

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The figures come just over a week before the Bank of England makes a decision whether to raise rates.

Chancellor Philip Hammond said that they show a "successful and resilient economy which is supporting a record number of people in employment".

Pressure on the Bank of England to raise interest as soon as next month rose as figures show the United Kingdom economy unexpectedly accelerated in the third quarter of the year.

One rate rise, or more?

Services increased by 0.4%, the same rate as Q2, and remains the largest contributor to GDP growth, with a strong performance in computer programming, motor trades and retail trade. The real question will be how rapidly rates rise through next year going back above the level they were cut to in March 2009 following the financial crisis.

"If the MPC doesn't raise interest rates on 2 November following this preliminary GDP estimate, Mark Carney will be branded as the central banker who cried wolf once too often".