UK reveals flagging GDP growth


The UK's GDP growth slowed in the third-quarter of 2015, affected by a slowing global economy and weak domestic demand.

Figures released by the Office of National Statistics (ONS) show that GDP grew only 0.5% between July and September, short of the previous quarter's 0.7%.

London's financial sector was expecting a 0.6% figure, and the lagging economy will put pressure on Chancellor George Osborne's handling of the UK's recovery.

The figures were likely to prompt speculation that any hike in interest rates by the Bank of England – currently expected next year – could be pushed back further.

In its breakdown, the ONS revealed services increased by 0.7%, production increased by 0.3%, agriculture increased by 0.5%, and construction output decreased by 2.2%.

Osborne tweeted: "GDP is 0.5%. UK continues to outperform other major economies. But global risks mean we go on with tough decisions to live within our means."

Howard Archer, chief UK and European economist at IHS Global Insight, said: “The third-quarter slowdown was slightly more than generally expected, while the breakdown of growth will likely reinforce concern that UK growth remains too reliant on the services sector and on consumer spending.”

Chris Williamson, chief economist at Markit, said: “The third quarter slowdown, and warning lights from recent business surveys about the weakness intensifying in September, suggests that policy makers will want more time to assess the extent of the slowdown as we move into the fourth quarter, effectively postponing any rate hikes until next year.”

Speaking to the Guardian, Ben Brettell, senior economist at financial services firm Hargreaves Lansdown said: "The UK economy has been losing momentum... Weaker construction and manufacturing output are the primary reasons for the slowdown, which could prompt concerns that the UK economy’s reliance on the services sector is increasing further."

Iron and steel industries have been hit especially hard, shrinking by 7%, while media production has seen substantial growth:

US GDP will be released on Thurday, while figures for eurozone countries are due next month.

The ONS figures are a snapshot and are subject to revision.

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