Join more than 165,000 subscribers and keep yourself informed with the latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
You are now subscribed
Your newsletter sign-up was successful
Want to add more newsletters?
An account already exists for this email address, please log in.
Economy loses momentum
Britain's economic recovery may have lost momentum in the third quarter figures from the Office for National Statistics (ONS) suggest.
Preliminaryfigures from the Office for National Statistics (ONS) suggest the UK's economic recovery may have lost momentum in the third quarter of the year. GDP is estimated to have grown by 0.5% between July and September, compared to growth of 0.7% in the previous quarter. The service sector continued to lead the way, expanding by 0.7%. Construction was a large drag on growth, by 2.2%.
What the commentators said
However, the strong pound, coupled with the slowdown of the global economy, "make exporting UK made goods expensive and difficult", said Larry Elliott in The Guardian. Meanwhile, low interest rates "make borrowing for consumption and speculation in financial assets cheap". The economy has lapsed back into a pattern where the service sector is strong and manufacturing is weak. "As was the case in the years leading up to the deep recession of 2008-2009, the economy is heavily reliant on the City and consumer spending."
The good news is that "real GDP is now 6.4% higher than the pre-recession peak in early 2008", said David Kern, chief economist at the British Chambers of Commerce, quoted in The Guardian. Nonetheless, we need further measures to support the recovery and boost growth, "with particular emphasis on exports and infrastructure investments. Fixing the fundamentals will place the economy on a surer footing".
Try 6 free issues of MoneyWeek today
Get unparalleled financial insight, analysis and expert opinion you can profit from.
Sign up for MoneyWeek’s free twice-daily newsletter.
Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
Overall, though, this does not look like the start of a "more serious slowdown", said Capital Economics. There are obstacles to overcome in the coming quarters, including uncertainty over the referendum on leaving the European Union and a renewed fiscal squeeze. Hence growth next year is unlikely to be spectacular. But there is a good chance that it will bounce back in 2017.
Join more than 165,000 subscribers and keep yourself informed with the latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
Marina Gerner is an award-winning journalist and columnist who has written for the Financial Times, the Times Literary Supplement, the Economist, The Guardian and Standpoint magazine in the UK; the New York Observer in the US; and die Bild and Frankfurter Rundschau in Germany.
Marina is also an adjunct professor at the NYU Stern School of Business at their London campus, and has a PhD from the London School of Economics.
Her first book, The Vagina Business, deals with the potential of “femtech” to transform women’s lives, and will be published by Icon Books in September 2024.
