RESILIENT economic growth continues to be recorded in the UK, according to today's official figures.
The economy grew by 0.8 per cent in the three months to September, the Office for National Statistics (ONS) confirmed.
And GDP was up 2.8 per cent compared to the same time last year. The figures mark a calendar year of consecutive growth in the UK.
Further good news came in the details, which “look more sustainable than in prior quarters” according to Andrew Goodwin, senior economist at the Ernst & Young ITEM Club.
“There is greater balance and this gives the impression of durability, and much smaller reliance on stockbuilding,” he added.
There was also less reliance on construction growth, which fell to 4 per cent, down from the unusually high second quarter rate of 9.5 per cent.
GDP was boosted by a surprise improvement in net trade as exports grew faster than imports.
However, there remain concerns for the economy’s prospects in the final quarter of the year, and into 2011. Growth in consumer spending remains weak, falling to 0.3 per cent.
Falling incomes, government spending cuts and the impending rise in VAT will pinch consumers, say analysts.
Combined with tight credit conditions and potential knock-on effects of the crisis in Ireland, GDP “looks set to slow further in the fourth quarter, possibly down to around 0.4%” according to Chris Williamson, Chief Economist at Markit.
Most analysts expect per quarter growth between 0.3 per cent and 0.5 per cent for next year.
The economy is in a robust state, but there is no room for complacency, said David Kern, Chief Economist at the British Chambers of Commerce (BCC).
“The Government must focus all its efforts on enabling the private sector to make 2011 a Year for Growth,” he said.
“Obstacles that hamper businesses in their efforts to create jobs, invest and export must be removed.”
The ONS will report on fourth quarter growth on 25 January in the coming year.
Charles Davis, Centre for Economics and Business Research
“2011 will be quite a bad year for growth. Rising commodity prices this year will lead to higher consumer prices next year. Expect rates to remain at 0.5% till end of 2012 to offset fiscal consolidation. QE3 at some stage is a real possibility.”
Nick Bate, Bank of America ML
“Exports have actually been quite strong this year. Net trade is up as imports have fallen. Also, it is not obvious that cuts have had a big impact on growth.”
Lai Wah Co, CBI
“The boost from the stock cycle has waned, as expected, but it was very encouraging to see net trade supporting growth for the first time in over a year.”