Saturday , June 10 2023

The British economy is growing fastest since the end of 2016


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The UK economy grew by 0.6% in the three months to September and increased consumption expenditure in warm weather, the State Statistics Bureau said.

The fourth quarter figure is in line with forecasts from the Bank of England and other forecasters.

However, the rapid growth in July was offset by a slowdown in August and September.

This is the highest quarterly growth rate since the fourth quarter of 2016, when the economy grew by 0.7%.

Analysts warned that the economy has a "low underlying pace", and growth will decline over the past three months.

The ONS also issued a separate monthly figure for September, which, like last month, showed a zero increase.

Services, accounting for three quarters of the economy, rose by only 0.3% over the three months to September.

After a slow start, construction activity increased by 2.1% in the fourth quarter. Production also increased after a slow second quarter, thanks to a strong quarter-on-quarter car production.

Household expenditure increased by 0.5% in the fourth quarter, while business investment dropped by 1.2%, reflecting the uncertainty surrounding Brexit's business.

Business investment is expected to increase by 0.2%, according to forecasts. Now it has entered into an agreement for three quarters in a row.


Simon Jack, Business Editor

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The overall situation is one of the sectors of the economy, which is still recovering from extremely weak weather conditions from the beginning to the year. Construction and energy production had a strong quarter, and the time was again played in July as sunlight and the World Cup increased consumption expenditure. It has been the strongest quarter for nearly two years, but the economy has not risen to a strong July pace, with no further growth in August and September.

Without worrying, but perhaps not surprisingly, business investment dropped sharply, matching anecdotal evidence of corporate caution in front of Brexit. Although the production of cars has increased compared to the second quarter of this year, it has decreased compared to the same period last year and domestic cars were very weak, which is an export that holds back the car industry.

Much as the chancellor is hilarious about today, but the third-quarter decline in business investment – the first time since the financial crisis – shows that companies are thinking that the sun can now be shining, but that there are large clouds.

"Signs of weakness"

Chancellor Philip Hammond said: "Today's positive growth of 0.6% is proof that our economy is at the heart. We have created an economy that works for everyone, with 3.3 million more workers, lower unemployment rates in each country, and salaries increased. the fastest for almost a decade. "

Rob Kents-Smith, Head of ANS National Accounts, said: "The economy saw a strong summer, although long-term economic growth was still low. In September, there are some weak points that slow down retail sales and reduce local car purchases.

"However, the production of cars for export increased quarter-on-quarter, increasing its output. At the same time, car imports dropped significantly, helping to improve the trade balance of the United Kingdom."

Samuel Tombs, Macroeconomic Key Macroeconomic Panteone, said: "For two consecutive years of stagnation in GDP, it has been emphasized that the economy has little momentum and that the strong growth rate in comparison with the previous quarter simply reflects the weather-related increase in the summer.

"The breakdown of GDP expenditure shows that business investment fell by 1.2% in the third quarter compared to the previous quarter, with a total decline of 2.4% from the peak in the fourth quarter of 2017. The risk of free-riding Brexit is a clear driver of the downturn."

Head of the British Chambers of Commerce Chief Suren Thiru said: "The strong growth recorded in the third quarter is likely to be a unique UK economy, and there is a steady lack of transparency and financial implications for Brexit for consumers and businesses in the coming quarters. activities. "

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