Britain’s GDP increased by 0.4 cent rise between July and September
Official data showed the country’s gross domestic product (GDP) increase by 0.4 cent rise between July and September.
The figure was above an average 0.3 per cent rise predicted by City economists for the period, in line with the rate in the first six months of the year.
Manufacturing output increased by a substantial one per cent in the third quarter in the year after pervious sluggish growth, while the services sector also grew by 0.4 cent rise.
But construction output shrank for the second quarter in a row, officially marking a recession in the sector.
The growth was a boost for Philip Hammond
We have a successful and resilient economy which is supporting a record number of people in employment
The better-than-expected growth was a boost for Chancellor Philip Hammond ahead of next month’s Budget.
He said: “We have a successful and resilient economy which is supporting a record number of people in employment.
“My focus now, and going into the Budget, is on boosting productivity so that we can deliver higher-wage jobs and a better standard of living for people across the country.”
Mr Hammond has been under fire from some Tory colleagues after suggesting Brexit had put a “cloud of uncertainty” over Britain’s economic outlook.
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The pound surged by 0.3 cent rise against both the euro and the dollar after the GDP figures were announced.
Senior Tory MP John Redwood said the economy’s performance was continuing to defy predictions of anti-Brexit doom mongers.
“This is good news that reminds us we have a growing economy,” the leading Brexit-supporter said.
“It is nothing to do with Brexit; we are still in the EU and still trade with the EU on the same terms as before the referendum.
The pound surged by 0.3 cent rise against both the euro and the dollar
“What we don’t need now is the Bank of England removing credit and loans from the economy.”
Yesterday’s GDP were released by the Office for National Statistics as the Bank of England’s Monetary Policy Committee continues to consider whether to raise interest from the current record low of 0.25 cent rise.
Committee members are thought to be under pressure to back a rate rise next month to try to curb inflation.
Howard Archer, EY ITEM Club’s chief economic adviser, said: “Improved third-quarter GDP growth of 0.4 cent rise quarter-on-quarter increases the chances that the Bank of England will raise interest rates from 0.25 cent rise to 0.5 cent rise on November 2 after the MPC meeting.”
Darren Morgan, the ONS head of national accounts, said: “Services, led by increases in IT, motor trades and retail, continued to drive GDP growth.
“Manufacturing also boosted the economy with an improved performance after a weak second quarter.
“However, construction output fell for the second consecutive quarter, although it remains above its pre-downturn peak.”
The figures showed that industrial production expanded by 1 cent rise over the quarter, boosted by a 1 cent rise jump from manufacturing and a 1.5 cent rise rise from mining and quarrying.
John Redwood said the economy’s performance was continuing to defy predictions
The increase helped offset a disappointing performance from the construction sector, which fell by 0.7 cent rise between July and September – the lowest drop since the third quarter of 2012.
John Hawksworth, chief economist at accountancy firm PwC, said: “These numbers do not change the big picture for the UK, which is of an economy that has slowed due to higher inflation linked to the weak pound and Brexit-related uncertainty dragging on business investment.
“But we should not overdo the gloom as there is nothing in this or other recent data to suggest that the slowdown is in danger of turning into a recession.”
A separate measure of the services sector – the index of services – showed output growth of 0.2 cent rise between July and August this year.