United Kingdom economy slows to 0.5% growth in third quarter

The service sector grew by 0.7 per cent, to continue its role as the main driver behind the country’s growth, while output in production increased by 0.3 per cent and agriculture by 0.5 per cent. Economists polled by Bloomberg reportedly expected the economy to grow at 0.6 percent.

The report may signal that the emerging-market slowdown has damaged prospects for Britain’s expansion.

“It’s important to remember this is only the first estimate of GDP – based on less than half of the data which will ultimately be available”.

“The overall economic recovery still has a few obstacles to overcome in the coming quarters, including uncertainty ahead of an European Union referendum and a renewed fiscal squeeze”, Capital Economics economist Vicky Redwood said. However, the sectoral pattern is mixed.

The ONS said a 0.7% increase in services activity was offset by 2.2% fall in construction growth and a 0.3% drop in manufacturing production amid a slowdown in China’s economy. Output is now 6.4 percent above its pre-recession peak.

In the three months to August, the index of services rose 0.9 percent from the previous three months, which was slightly less than the 1 percent gain economists had expected. He said in an interview Sunday that rate increases are “a possibility not a certainty”, and “if events mean that does not happen and rate rises are not appropriate then we will do the right thing and we will not adjust rates”. “Howard Archer, chief United Kingdom and European economist at IHS Global Insight, said the easing in GDP “reinforces our belief” that the Bank of England will hold off on raising rates until the second quarter of 2016″. But GDP figures, published today, will give a few cause for concern.