View your shopping bag

Items: (0) £0.00
  • €
  • $
  • £

Checkout

Some good news at last as GDP rises

There was a strong upturn in the UK economy in the third quarter of this year, as GDP grew by 1% from the second quarter level. This was following three consecutive quarters of contraction when the economy slipped back into recession and was the strongest quarterly growth since 2007 according to the figures released this morning by the Office for National Statistics (ONS).

Olympic and paralympic ticket sales helped boost the economy

However, the ONS does point out that the economy is no larger than it was a year earlier. But, the 1% growth figure was at the top end of estimates and was boosted by the effects of ticket sales for the Olympic and Paralympic Games.

When the figures are broken down they show that the services sector accounted for the whole of the 1% growth in GDP in the third quarter. There was a rise of 0.2% in growth in the production industries but this was offset by a 0.2% decline in the construction industry.

The ONS puts the decline in construction over recent quarters down to lower public sector capital spending, a weak housing market and the end of the major Olympic construction projects. The construction sector has actually contracted by 17% since the pre-recession peak, whereas the service sector is now slightly higher than the previous peak.

So, what can we expect moving forward? When the ticket sales are excluded from the growth figures, it shows that the UK economy has grown by 0.4% over the past two quarters, with an average growth rate of 0.2% per quarter. This is obviously very subdued compared to the headline growth figure for the third quarter. However, it is a very positive sign of the economy moving forward.

Overall, the ONS maintains that there is a mixed picture being shown of our economic performance. On the one hand, labour markets are performing strongly, with employment levels reaching a record high of 29.6 million in the three months to August this year. There was also a rise in retail sales volumes in September. On the other hand, both exports and industrial production declined in the last month’s figures.

Tags: , , , , ,
Posted in economic growth, GDP

Comments are closed.