Foreign trade puts biggest drag on UK growth
Official data in the UK confirms the slow economic growth between July and September in the backdrop of a fragile growth worldwide.
The figures released by Office for National Statistics (ONS) on Friday show the gross domestic product (GDP) grew just 0.5 percent in the third quarter. That was unchanged from the initial ONS estimate and followed second-quarter growth of 0.7 percent.
The growth figure was 2.3% higher than a year ago, down from 2.4% in the second quarter and showing the UK economy had slowed from last year's rapid 2.9% rate which outstripped those of other advanced economies.
At the moment, the total GDP is around 6.4% above the 2008 peak. The slowdown reflects a global weakening led by emerging markets such as China while British exporters have struggled with a rise in sterling this year.
“Today’s GDP and services data reflect an economy driven by domestic demand that is resilient to foreign risks. The idea that the UK economy would be affected in light of accumulating foreign risks through more channels than trade is just that, an idea,” Kallum Pickering, an economist at German bank Berenberg said.
Prospects for the UK depend on what happens to productivity. According to the Office of Budget Responsibility (OBR), output per hour will rise by just 3.3 per cent between 2008 and 2015. The output is at present far below pre-crisis trends.
The latest data, however, shows that while consumer spending remains strong, the trade lopped 1.5 percentage points off the economic expansion in the third quarter.
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