The UK economy has been growing fastest since the end of 2016

People working in a factoryimage rights
Getty Images

The UK economy grew 0.6% in the three months to September, with warm weather boosting consumer spending, the National Statistics Office said.

Third quarter results are in line with the Bank of England and other forecasters forecasts.

However, strong 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 "little underlying momentum" and that growth will slow in the last three months.

The ONS also published a separate monthly number for September, which showed zero growth as in the previous month.

Services, which account for three-quarters of the economy, grew by only 0.3% in the three months to September.

After a slow start to the year, construction activity rose by 2.1% in the quarter. The manufacturing sector also gained in the quarter following a slow second quarter thanks to strong car production.

Household spending increased 0.5% in the quarter, while business investment declined 1.2%, reflecting companies' uncertainty about the impact of Brexit.

Business investment was projected to increase by 0.2%. It has now contracted for three quarters in a row.

"Signs of weakness"

Rob Kent-Smith, Head of National Accounts at ONS said: "The economy enjoyed a strong summer, although longer-term economic growth remained muted, with some signs of weakness in September with declining retail sales and a slump in domestic cars -Käufen.

"However, auto production for export grew over the quarter and increased factory production, and car imports dropped significantly and helped to improve Britain's trade balance."

Suren Thiru, director of economics at the UK Chamber of Commerce, said: "It is still likely that the stronger third-quarter growth will be a one-off effect for the UK economy, with persistent Brexit uncertainty and financial bottlenecks among consumers and businesses increasingly burdened in the coming quarters.

"Against this backdrop, the recent brash rhetoric of the Bank of England looks a bit misguided and risks further weakening the confidence of companies and consumers.

"With the inflation in the downward direction and the subdued growth prospects of the UK, there is still room for the central bank to keep interest rates for some time to come."

Leave a comment

Send a Comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.