Britain's third quarter GDP growth revised: Financial services provide better than expected growth

 
Oliver Gill
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Britain's third quarter growth has been revised up – but in an official shake-up of the figures year-on-year growth has fallen.

The UK's GDP growth in the third quarter had previously been reported as 0.5 per cent but today updated statistics revised this up to 0.6 per cent.

However, the official statistics for the first and second quarters were revised down – each by 0.1 per cent – meaning year-on-year growth to the end of the third quarter was actually slightly down, at 2.2 per cent rather than 2.3 per cent.

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“Robust consumer demand continued to help the UK economy grow steadily in the third quarter of 2016, said the head of the Office for National Statistics (ONS) Darren Morgan. And he added the upwards revision was due to a stronger than expected performance in one of London's strongest sectors:

Growth was slightly stronger than first thought, though, due to greater output in the financial sector.

New figures on services also suggest that growth in that predominant sector of the economy continued into October, helped in large part by another strong showing from the retailers.

Clocking-off to Christmas cheer

EY's Item Club chief economist Martin Beck said today's upward revision "brought some unexpected pre-Christmas cheer".

The news augured well for the full year performance of UK plc, Beck said: "While we expect the pace of GDP growth to slow through 2017, it appears set to see another solid outturn for the fourth quarter of 2016.

"A strong outturn for services output in October, combined with upward revisions to previous months, leaves the economy on course to see GDP growth of around 0.5 per cent in the fourth quarter.”

Read more: Services PMI: The UK's GDP could be rising faster than expected

Paul Sirani, chief market analyst at Xtrade was, however, less positive about what lay in wait in the New Year.

“City traders clock off at lunchtime today and they’ll do so in the knowledge that the UK’s GDP figures have been revised up for the quarter, he said. "However, continued uncertainty means the UK faces an unenviable 2017.

“Those who predicted a recession in the aftermath of Brexit may have raised their forecasts since, but uncertainty remains as Prime Minister Theresa May prepares to trigger Article 50.”

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