Wednesday, October 4

UK economy in shock slowdown as recovery loses steam



Official figures show UK growth was weaker than thought in the second and third quarters. Britain’s recovery is losing steam, according to official data that showed growth this year was weaker than previously thought.

The economy expanded by just 0.4pc in the third quarter, from a previous estimate of 0.5pc, according to revised figures published by the Office for National Statistics (ONS).

Growth in the second quarter was also revised down to 0.5pc. Statisticians had previously thought the economy grew by 0.7pc over the period.

The ONS said weaker services growth drove the third-quarter revision as financial services firms expanded at a much slower pace than initially thought. Inventories led to the second-quarter change.

On an annual basis the UK economy expanded by 2.1pc in the third quarter, down from a previous estimate of 2.3pc. The revised figures mean the UK economy is now 6.1pc larger than its pre-crisis peak, compared with an earlier estimate of 6.4pc.

The ONS also believes GDP per capita surpassed its 2008 pre-crash high a quarter later than previously assumed. Growth per head was 0.3pc above its pre-downturn peak in the third quarter of 2015, having surpassed it in the second quarter of this year.

A spokesman for the Treasury insisted that the UK’s economic performance remained “strong”.

“The UK was the fastest growing economy in the G7 last year, we’re leading the pack with the US this year, we have a record high employment rate and the deficit is down,” the spokesman said.