United Kingdom GDP Q3 2016

United Kingdom

United Kingdom: Economy decelerates in Q3 but less than expected

In the third quarter, the UK's GDP expanded a seasonally-adjusted 0.5% over the previous quarter, according to a preliminary estimate released by the Office for National Statistics (ONS) on 27 October. The print was down slightly from the 0.7% increase recorded in the previous quarter but exceeded the 0.3% expansion the markets had expected.

In the third quarter, industry swung from a 2.1% expansion in the second quarter to 0.4% contraction. The construction sector also deteriorated in Q3, contracting 1.4%. The figure was down from the previous quarter’s 0.1% decrease. Conversely, growth in services improved from Q2’s 0.6% to 0.8% in Q3 and the agricultural sector contracted 0.7%—an improvement over the previous quarter’s 1.0% drop.

In annual terms, GDP expanded 2.3%, which was an improvement over the 2.1% increase in Q2 and marked the fastest increase in over a year.

The Central Bank expects the economy to expand 1.9% this year and 0.7% in 2017. This month, FocusEconomics’ panelists have upgraded their GDP forecast for 2016 and the Consensus Forecast now foresees 1.8% growth—up 0.2 percentage points from last month’s estimate. The Consensus Forecast shows GDP expanding 0.7% in 2017, which is also up 0.2 percentage points from last month’s estimate.


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United Kingdom GDP Q3 2016

Note: Quarter-on-quarter changes of seasonally adjusted GDP and year-on-year variation in %.
Source: Office for National Statistics (ONS) and FocusEconomics Consensus Forecast.


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