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UK economy grows a faster-than-expected 0.8% | |
(about 4 hours later) | |
The UK's economy grew at 0.8% between July and September, official figures show, suggesting the economy is recovering faster than expected. | |
It follows 1.2% growth in the second quarter of the year, and is double the 0.4% expected by analysts. | |
The gross domestic product (GDP) figures released by the Office for National Statistics (ONS) cover the three months to the end of September. | The gross domestic product (GDP) figures released by the Office for National Statistics (ONS) cover the three months to the end of September. |
It is only the ONS's first estimate, and may be revised later. | |
The pound jumped on the news, which lowered expectations that the Bank of England will engage in further quantitative easing in the near future. | |
The pound rose one cent against the dollar, to $1.585, immediately following the data release. | |
Some economists say the UK has stalled on the back of spending cut threats. | Some economists say the UK has stalled on the back of spending cut threats. |
Philip Shaw, from Investec Securities, says the prospect of domestic cuts and international uncertainties make it difficult for the UK to "establish proper momentum". | Philip Shaw, from Investec Securities, says the prospect of domestic cuts and international uncertainties make it difficult for the UK to "establish proper momentum". |
'Inevitable bounce' | 'Inevitable bounce' |
And HSBC analyst, Madhur Jha, says households remain worried about the labour market and wealth from the housing market. | And HSBC analyst, Madhur Jha, says households remain worried about the labour market and wealth from the housing market. |
"At the same time, they want to pay down debt because of the uncertainty surrounding the future outlook of growth," he says. | "At the same time, they want to pay down debt because of the uncertainty surrounding the future outlook of growth," he says. |
Consumers may have already been worried about the government cuts, he adds. | Consumers may have already been worried about the government cuts, he adds. |
But Howard Archer, chief economist at IHS Global Insight, warns against reading too much into the third quarter figures, because preliminary ONS estimates can be inaccurate. | But Howard Archer, chief economist at IHS Global Insight, warns against reading too much into the third quarter figures, because preliminary ONS estimates can be inaccurate. |
The BBC's chief economics correspondent, Hugh Pym, says growth was so rapid between April and June that a slowdown was almost inevitable. | |
The 1.2% rise in economic output in that period was seen by some as an inevitable bounce back after a deep recession, and unlikely to be repeated, he adds. | The 1.2% rise in economic output in that period was seen by some as an inevitable bounce back after a deep recession, and unlikely to be repeated, he adds. |
Confidence in the manufacturing and services sectors has dropped due to concerns surrounding the impact of the spending cuts. | Confidence in the manufacturing and services sectors has dropped due to concerns surrounding the impact of the spending cuts. |
And weaker-than-expected retail sales figures for September has added to the concerns, with sales slipping 0.2%. | And weaker-than-expected retail sales figures for September has added to the concerns, with sales slipping 0.2%. |
Meanwhile, the housing market has also started to suffer. Figures released by the Nationwide Building Society later this week are expected to show a 0.4% fall in property prices between September and October. | Meanwhile, the housing market has also started to suffer. Figures released by the Nationwide Building Society later this week are expected to show a 0.4% fall in property prices between September and October. |
The third quarter GDP figures are also likely to have a bearing on the Bank of England's plans for quantitative easing (QE) - measures to pump more money into the economy. | The third quarter GDP figures are also likely to have a bearing on the Bank of England's plans for quantitative easing (QE) - measures to pump more money into the economy. |