United Kingdom: Third quarter growth confirmed at 1.0 percent
November 27, 2012
In the third quarter, GDP growth was confirmed at a seasonally adjusted 1.0% over the previous quarter, according to the second estimate released by the Office for National Statistics (ONS) on 27 November. The strong reading marked, in fact, the fastest pace of expansion seen in five years. Compared to the same period last year, the economy declined 0.1%, which represents an improvement over the 0.5% contraction tallied in the second quarter. The improvement was mostly driven by a stronger external sector. Exports expanded a healthy 1.7% (Q2: -1.1% quarter-on-quarter), while imports contracted 0.4% (Q2: +1.4% qoq), prompting the contribution from the external sector to overall growth to swing from minus 0.8 percentage points in the second quarter to plus 0.7 percentage points in the third. On the domestic front, both private and government consumption grew 0.6%, which contrasted the 0.2% and 1.6% declines observed respectively in the second quarter. Moreover, fixed investment increased 0.5%, which contrasted the 2.7% drop seen in the second quarter. Based on figures from its latest inflation report from November, the Bank of England projects growth to remain flat this year before accelerating to 1.1% next year.