The U.K. economy expanded as estimated on spending and foreign demand in the third quarter, but the pace of growth moderated in the wake of 'Brexit' vote.
Gross domestic product climbed 0.5 percent sequentially, slower than the 0.7 percent expansion registered in the second quarter, the second estimate from the Office for National Statistics showed Friday.
The sequential growth rate was left unrevised from the preliminary estimate published on October 27. This was the 15th consecutive quarter of positive growth since the first quarter of 2013.
On a yearly basis, GDP climbed 2.3 percent in the third quarter, unrevised from the previous estimate.
On the production side, the dominant services sector rose 0.8 percent as estimated. Meanwhile, construction output decreased 1.1 percent instead of 1.4 percent.
Production output fell 0.5 percent versus the prior estimate of 0.4 percent. Manufacturing dropped by revised 0.9 percent.
The expenditure-side breakdown of GDP showed that household spending and government expenditure increased 0.7 percent and 0.4 percent, respectively. Gross fixed capital formation advanced 1.1 percent.
Including the alignment adjustment, the level of inventories increased by GBP 3.1 billion in the third quarter, following an increase of GBP 3.0 billion in the previous quarter.
The trade balance deficit narrowed to GBP 12.4 billion from GBP 15.7 billion in the previous quarter. The net trade contributed a positive 0.7 percentage points.
According to ONS, business investment grew 0.9 percent to GBP 44.2 billion in the third quarter. Annually, investment fell 1.6 percent.
The business investment rose by 0.9 percent on the quarter too, putting to rest worries that referendum uncertainty would dampen spending in the immediate aftermath of the referendum, Ruth Gregory, an economist at Capital Economics, said.
But the actual triggering of Article 50 next year could prompt further falls in business sentiment and investment, the economist added.
Chancellor of the Exchequer Philip Hammond in his Autumn Statement downgraded the U.K. growth forecast for next year to 1.4 percent from 2.2 percent. Meanwhile, the growth outlook for this year was raised to 2.1 percent from 2 percent seen in March.
Another report from ONS today showed that services output grew 0.2 percent in September from August, when it gained 0.3 percent. Year-on-year, the index of services increased 2.9 percent.
by RTT Staff Writer
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