United Kingdom: Economy expands in-line with preliminary estimate
November 27, 2013
In the third quarter, GDP expanded a seasonally-adjusted 0.8% over the previous quarter, according to more detailed figures released by the Office for National Statistics (ONS) on 27 November (Q2: +0.7% quarter-on-quarter). The reading was unchanged from the preliminary estimate and met market expectations. In annual terms, GDP growth accelerated from a 1.3% expansion in Q2 to a 1.5% rise in Q3.
Revised figures showed that the slight acceleration came on the back of improving domestic demand. Private consumption accelerated from a 0.3% expansion in the second quarter to a 0.8% rise in the third quarter, while government consumption remained unchanged at Q2's 0.5% expansion. Fixed investment rose from a 0.8% expansion in Q2 to a 1.4% increase in Q3.
On the external side of the economy, exports of goods and services contracted 2.4% in the third quarter, which contrasted the 3.0% expansion recorded in the second quarter. In addition, imports decelerated from a 2.9% expansion in Q2 to a 0.4% rise in Q3. As a result, the external sector's net contribution to the overall economy dropped from zero percentage points in Q2 to minus 0.9 percentage points in Q3.
In the latest inflation report from November, the Bank of England (BoE) projects the economy to grow 1.6% this year and 2.8% in 2014. FocusEconomics Consensus Forecast panelists expect the economy to grow 1.4% this year, which is up 0.1 percentage points from the previous month's estimate. The panel sees growth accelerating to 2.3% in 2014, which is also up 0.1 percentage points from last month's estimate.
Author: Dirina Mançellari, Senior Economist