Yep, UK GDP grew 0.5 per cent last quarter

 
Emma Haslett
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The services sector drove most of the growth (Source: Getty)

The UK's economy edged up 0.5 per cent in the third quarter of the year, a second estimate of the official figure confirmed - down from 0.7 per cent in the second quarter.

The figure is the first to cover the full three months after the UK voted to leave the European Union in June. When the Office for National Statistics (ONS) originally published it in October, it was higher than expectations of 0.3 per cent.

The pound rose 0.12 per cent against the dollar to $1.2466, and pared some of this morning's losses against the euro, rising to €1.766 from a low of €1.717, although it remained 0.26 per cent lower.

Although it was good news the economy grew in the third quarter in spite of warnings of a slowdown from economists, growth was still weak, barely rising above the 0.5 per cent long-term average the UK has mustered since the end of the financial crisis.

And today the ONS confirmed all the growth came from one sector: the services sector, which rose 0.8 per cent. The economy's three other main sectors - agriculture, forestry and fishing and construction - all shrank on the previous quarter.

Read more: A "hard Brexit" could undermine the very things driving GDP growth

Production output also decreased, falling 0.5 per cent. That was driven by a 0.9 per cent fall in manufacturing, and a 4.3 per cent fall in electricity, gas, steam and air conditioning supply.

"The official GDP figures continue to indicate that the Brexit vote did not immediately damage the economy, although the deterioration of the activity surveys in the third quarter signals a high chance of future downward revisions," said Samuel Tombs, chief UK economist at Pantheon Macroeconomics.

"The outlook for stagnation in real incomes next year, as inflation rockets, points to a sharp slowdown in consumer spending growth ahead," he added.

Read more: What do strong GDP figures mean for UK interest rates?

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