A revised estimate showed UK gross domestic product (GDP) grew by 0.4 per cent in the third quarter of 2019 showing an underlying slowing of the UK economy.
This was higher than the expected 0.3 per cent but reflected high domestic and global uncertainty, the Office of National Statistics (ONS) said today in its quarterly economic commentary for July to September 2019.
Quarterly GDP growth has averaged 0.3 per cent this year, with GDP up only 1.1 per cent compared with the same quarter last year.
In the three months to October 2019 the economy was stagnant, reflecting a services slowdown and falling output in production and construction. Services output grew 0.2 per cent and was offset by 0.7 and 0.3 per cent drops in production and construction output respectively.
Since the third quarter, the UK’s general election produced a significant majorirty for the conservative party, providing clarity moving towards Britain’s exit from the European Union.
The UK’s current account deficit, the difference between spending on imports and income from exports, narrowed to 2.8 per cent of GDP, its lowest level since early 2012.
A surge in exports narrowed the current account deficit to £15.9bn in the third quarter of 2019, compared with £24.2bn in the second quarter.
On Monday the Bank of England (BoE) said the current account deficit poses economic risks. If foreign investors’ demand for British assets weakens, sterling could drop which would make it harder for British businesses and consumers to raise finance or borrow.
Sajid Javid pointed to the figures on Twitter as demonstrating the need to finalise Britain’s departure from the European Union.
The world economy has slowed which is partially due to increased trade protectionism. The International Monetary Fund (IMF) expects global GDP to grow by three per cent this year, the lowest level since the global financial crisis.
The IMF’s latest world economic outlook said “Rising trade and geopolitical tensions have increased uncertainty about the future of the global trading system.”
Meanwhile the employment rate hit a record high of 76.2 per cent in the three months to October with unemployment at a multi-decade low of 3.8 per cent.