Economy - - Dec 23,2016
There were no signs of a Brexit-linked slowdown in the UK economy as it grew by 0.6% in the third quarter, more than previously estimated.
Growth for the third quarter – July to September period – was previously anticipated at 0.5% by the Office for National Statistics (ONS). It also said that the annual rate of growth had eased to 2.2 percent due to some other reasons.
The latest data report suggested that the country’s economic dependence on consumer spending was greater than firstly thought in the three months to September as it offset a markedly worse picture for trade. ONS data indicated that the business and financial sector was more active than previously estimated.
However, the ONS cut down its expectations of growth in the first and second quarter of this year. It revealed that the economy grew by 0.3 percent in the first quarter as compared with an earlier figure of 0.4 percent and trimmed its estimate for second-quarter growth to 0.6 percent from 0.7 percent.
In addition, separate figures from the ONS report depicted that the UK's current account deficit rose back towards record levels in the third quarter, with few signs that the fall in the pound in the wake of the Brexit vote has helped to boost exports. The gap widened to £25.494bn for the period, from a deficit of £22.079bn in the second quarter. This was, however, lower than economists had expected but it caused the deficit to rise to 5.2% of GDP from 4.6%.
Consumer spending is also set to face a tougher test in the upcoming year as inflation have risen to two-year high and is predicted to climb further as imports become more expensive. This will squeeze the household spending as rising costs become more likely to be passed on through new supply contracts.