UK Q3 GDP confirmed at 0.5%

Growth in the UK economy was in line with expectations in the third quarter, according to data released by the Office for National Statistics.

UK gross domestic product was confirmed at 0.5% in the quarter from July to September, down from 0.7% quarter-on-quarter growth in the second quarter but in line with analysts’ forecasts and the preliminary reading.

On the year, growth was confirmed at 2.3%, also in line with expectations and the first estimate.

Business investment was estimated to have increased by 0.9% in the third quarter compared with the previous quarter, but was down 1.6% on the year.

Following a 1% drop in the second quarter, exports were up 0.7% in the third quarter, while imports fell 1.5% following a 1.3% jump the previous quarter.

Howard Archer, chief European and UK economist at IHS Markit, said: “While down from 0.7% quarter-on-quarter growth in the second quarter, this can still be considered a highly resilient performance in the aftermath of June’s Brexit vote. Indeed, it was better than first quarter growth of 0.4% quarter-on-quarter.”

Archer expects the UK economy to grow by 2.1% in 2016. “This assumes that the economy will expand by a respectable 0.4% quarter-on-quarter in the fourth quarter. The October survey evidence was decent, while retail sales surged during the month. In fact, October’s surge in retail sales suggests that there is a very real possibility that growth in the fourth quarter could again surprise on the upside.”