SCOTT WOODS takes his weekly look at the global financial markets.
The UK economy has shown some signs of resilience, posting a higher than expected growth rate during the third quarter.
Official data published by the Office for National Statistics (ONS) suggests that gross domestic product (GDP) rose by 0.4 per cent in the three months to September 2017. This preliminary third quarter estimate was higher than the 0.3 per cent growth rates recorded during each of the first two quarters of this year. It was also 0.1 per cent higher than the consensus forecast from a poll of city economists.
The dominant services sector, which accounts for around 80 per cent of UK economic output, was the main driver of third quarter growth, expanding by 0.4 per cent. The data also showed that manufacturing output returned to growth after a weak second quarter, although construction output contracted for the second quarter in a row.
The better than expected growth figures did provide some respite for the Chancellor, who said: “It’s a solid performance by the UK economy in the third quarter and its outperformed market expectations, as the UK economy has done overall since the referendum last year. What it shows is the underlying fundamental strength of this economy”.
However, while it’s certainly true the latest growth figures exceeded market expectations, the GDP data still paints a relatively weak picture of the UK economy. Indeed, over the past 12 months GDP grew at a rate of just 1.5 per cent; the joint-slowest rate of growth for over four years.
In addition, UK economic growth rates continue to lag behind other industrialised countries, including the US, which recently reported growth at an annualised rate of 3.0 per cent during the three months to the end of September 2017.
Source of information: Intrinsic FS Economic Review
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