This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at https://www.theguardian.com/business/live/2017/oct/25/uk-gdp-britain-growth-slowdown-brexit-pound-ftse-business-live
The article has changed 17 times. There is an RSS feed of changes available.
| Version 2 | Version 3 |
|---|---|
| UK GDP: Britain's economy grew by 0.4% as Brexit slowdown continues - business live | |
| (35 minutes later) | |
| 10.14am BST | |
| 10:14 | |
| Experts: UK still suffering from Brexit | |
| Peter Dixon, economist at Commerzbank, says Britain’s economy is still suffering from the Brexit vote last year, and the slide in the value of the pound. | |
| He argues that the 0.4% growth recorded in the July-September quarter shouldn’t be celebrated. | |
| Dixon writes: | |
| UK GDP growth....was a little bit above what we had expected but still below the rates of growth we enjoyed back in 2016 as service sector growth appears to be running around one or two tenths slower. | |
| This in turn may be a consequence of the weakness of consumption, triggered by the recent inflation pickup which itself is a consequence of the Brexit-induced collapse in sterling. | |
| All in all, it appears that the economy is running around 0.5% per year more slowly than prior to the EU referendum. | |
| Professor Costas Milas, of the University of Liverpool’s Management School, agrees that the economic picture isn’t rosy. | |
| Prof Milas: | |
| Brexit-related economic uncertainty is taking a toll on the economy not only in terms of getting stuck to 1.5% annual growth for 2017 Q3 but also in terms of the “quality” of the reading itself. | |
| Indeed, since the Brexit vote, the first reading of ONS has over-estimated annual GDP growth by a notable average of 0.3%. | |
| Neil Wilson of ETX Capital says the UK economy is ‘stuck in second gear’, adding. | |
| Year-on-year growth stands at 1.5%, which if it continues would be the weakest expansion since the crisis. The productivity puzzle remains unsolved - GDP per head lagged the headline number and increased by just 0.3%. | |
| Yael Selfin, KPMG’s chief UK economist, warns that the economy isn’t growing fast enough to justify tax cuts in next month’s budget: | |
| UK Q3 GDP growth up marginally to 0.4% signals continued lacklustre performance. No room for meaningful giveaways in the Budget next month. | |
| 10.07am BST | |
| 10:07 | |
| Here’s some detail of the UK GDP report, showing that computer programming and the UK car sector grew strongly over the summer. | |
| The strong performance by the motor industry is a surprise, as the UK’s largest car dealer, Pendragon, issued a profit warning on Monday.... | |
| Here’s some really granular detail: | |
| Here's the 10 fastest growing sectors of the UK economy in Q3. Apparently we broke a lot of things... pic.twitter.com/efFoIzyIgU | |
| 10.01am BST | |
| 10:01 | |
| Hammond: We need to boost productivity | |
| The Treasury have released a comment from Chancellor Philip Hammond, although it doesn’t really address the GDP figures directly.... | |
| “We have a successful and resilient economy which is supporting a record number of people in employment. My focus now, and going into the Budget, is on boosting productivity so that we can deliver higher-wage jobs and a better standard of living for people across the country. | |
| “That is why I am visiting the Francis Crick Institute, where they are using cutting-edge research to generate real-life health improvements. The UK has world-leading expertise in life sciences – an industry that employs hundreds of thousands of people – and it is through supporting growth in these cutting-edge industries that we will build a competitive economy that works for everyone.” | |
| Updated | |
| at 10.04am BST | |
| 9.58am BST | |
| 09:58 | |
| Several analysts are pointing out that Britain’s growth rate remains unimpressive, despite rising in the last quarter: | |
| Reaction fr @XTBUK: Compared to majority of G20 countries UK growth remains tepid #ukgdp | |
| Britain's growth is still weaker than it was in 2016, despite boost from latest GDP data https://t.co/8w2HXaprVE pic.twitter.com/3h60cZSfzz | |
| GDP per person up 0.3% year-on-year in the third quarter. That's double the rates recorded in Q1 and Q2, but still below historical norms pic.twitter.com/YzCXgOiGKc | |
| 9.49am BST | |
| 09:49 | |
| Geraint Johnes, Professor of Economics at Lancaster University Management School, says Britain is only achieving ‘stable but slow growth’: | |
| “The headline growth of 0.4% over the third quarter represents a slight increase over the second quarter figure. | |
| “Over the year, growth is just 1.5%, and the quarterly figure suggests little momentum going forward. | |
| 9.49am BST | |
| 09:49 | |
| Pound rises after GDP data | |
| Sterling has risen on the back of today’s growth report, up 0.25% against the US dollar to $1.317. | |
| City traders are concluding that the pick-up in growth raises the chances of a UK interest rate rise next month. | |
| Pound pops up to $1.3172 after U.K. #GDP rises 0.4% in Q3 vs. 0.3% estimate $gbpusd pic.twitter.com/X49ueCgct9 | |
| 9.44am BST | |
| 09:44 | |
| This pick-up in UK growth means that Britain still hasn’t suffered the recession that some experts predicted if the country voted to leave the EU. | |
| However, 0.4% is a still below the UK’s long-term growth rate. As this chart shows, 2017 could be the weakest year for the economy since the financial crisis (the 2012 figures are distorted by the London Olympics). | |
| 9.39am BST | 9.39am BST |
| 09:39 | 09:39 |
| If you adjust for population changes, UK GDP rose by 0.3% during the last quarter. | If you adjust for population changes, UK GDP rose by 0.3% during the last quarter. |
| 9.34am BST | 9.34am BST |
| 09:34 | 09:34 |
| But....UK construction output shrank for the second quarter in a row, which means Britain’s building sector is in recession. | But....UK construction output shrank for the second quarter in a row, which means Britain’s building sector is in recession. |
| 9.34am BST | 9.34am BST |
| 09:34 | 09:34 |
| UK service sector and manufacturing are both growing | UK service sector and manufacturing are both growing |
| Britain’s service sector provided the bulk of the growth in the last quarter. It expanded by 0.4% in the July-September period. | Britain’s service sector provided the bulk of the growth in the last quarter. It expanded by 0.4% in the July-September period. |
| The ONS says services was “the largest contributor to GDP growth, with a strong performance in computer programming, motor trades and retail trade.” | The ONS says services was “the largest contributor to GDP growth, with a strong performance in computer programming, motor trades and retail trade.” |
| Britain manufacturing also returned to growth, with output rising by a punchy 1.0% during the quarter. | Britain manufacturing also returned to growth, with output rising by a punchy 1.0% during the quarter. |
| 9.30am BST | 9.30am BST |
| 09:30 | 09:30 |
| UK GDP DATA RELEASED | UK GDP DATA RELEASED |
| Breaking: The UK economy grew by 0.4% in the third quarter of 2017. | Breaking: The UK economy grew by 0.4% in the third quarter of 2017. |
| That’s up from 0.3% in the second quarter, and a little better than the City expected. | That’s up from 0.3% in the second quarter, and a little better than the City expected. |
| More to follow! | More to follow! |
| 9.28am BST | 9.28am BST |
| 09:28 | 09:28 |
| Just two minutes to go until we discover how Britain’s economy performed over the summer.... | Just two minutes to go until we discover how Britain’s economy performed over the summer.... |
| 9.24am BST | 9.24am BST |
| 09:24 | 09:24 |
| The pound is down slightly against the US dollar this morning at $1.312, and also against the euro at €1.115. | The pound is down slightly against the US dollar this morning at $1.312, and also against the euro at €1.115. |
| It may move sharply in a few minutes, if the GDP figures are a surprise... | It may move sharply in a few minutes, if the GDP figures are a surprise... |
| UK Q3 GDP due next.exp 0.3%q/q, 1.5% y/y | UK Q3 GDP due next.exp 0.3%q/q, 1.5% y/y |
| 9.04am BST | 9.04am BST |
| 09:04 | 09:04 |
| Rebecca O’Keeffe, head of investment at Interactive Investor, says today’s GDP report will influence whether UK interest rates rise this year (for the first time in a decade). | Rebecca O’Keeffe, head of investment at Interactive Investor, says today’s GDP report will influence whether UK interest rates rise this year (for the first time in a decade). |
| “With expectations still rife that the Bank of England will raise interest rates next month, today’s GDP figures will be closely scrutinised to see whether they give any excuse for policymakers to hold fire or if they support their hawkish intent. | “With expectations still rife that the Bank of England will raise interest rates next month, today’s GDP figures will be closely scrutinised to see whether they give any excuse for policymakers to hold fire or if they support their hawkish intent. |
| Uncertainty about Brexit, the relatively fragile state of the British economy and fears over personal debt and household incomes could all be making Mr Carney think twice about whether now is the right time to start the process of raising rates. However, the prospect of delaying could lead to accusations of the MPC crying wolf again and severely dent sterling. Rocks and hard places abound, and the Governor will be keeping his fingers crossed that today’s figure gives him a valid excuse either way. | Uncertainty about Brexit, the relatively fragile state of the British economy and fears over personal debt and household incomes could all be making Mr Carney think twice about whether now is the right time to start the process of raising rates. However, the prospect of delaying could lead to accusations of the MPC crying wolf again and severely dent sterling. Rocks and hard places abound, and the Governor will be keeping his fingers crossed that today’s figure gives him a valid excuse either way. |
| 8.50am BST | 8.50am BST |
| 08:50 | 08:50 |
| The Treasury have created a little video explaining how GDP works: | The Treasury have created a little video explaining how GDP works: |
| New #GDP figures are published today at 9.30am – find out what that means and why it matters: https://t.co/EJvB2mVvXK pic.twitter.com/M0YgzAQ6Wo | New #GDP figures are published today at 9.30am – find out what that means and why it matters: https://t.co/EJvB2mVvXK pic.twitter.com/M0YgzAQ6Wo |
| 8.42am BST | 8.42am BST |
| 08:42 | 08:42 |
| While we wait for the UK growth report, do listen to Robert Kennedy explaining how GDP is an imperfect measure. | While we wait for the UK growth report, do listen to Robert Kennedy explaining how GDP is an imperfect measure. |
| Kennedy gave the speech to the University of Kansas in 1968, a few months before he was assassinated, saying: | Kennedy gave the speech to the University of Kansas in 1968, a few months before he was assassinated, saying: |
| Yet the gross national product does not allow for the health of our children, the quality of their education or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. | Yet the gross national product does not allow for the health of our children, the quality of their education or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. |
| It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country, it measures everything in short, except that which makes life worthwhile. | It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country, it measures everything in short, except that which makes life worthwhile. |
| Updated | Updated |
| at 8.53am BST | at 8.53am BST |
| 8.31am BST | 8.31am BST |
| 08:31 | 08:31 |
| Britain’s economy outperformed the eurozone for several years, during the euro debt crisis. | Britain’s economy outperformed the eurozone for several years, during the euro debt crisis. |
| But as this chart show, the eurozone’s growth rate caught up in 2016, and outpaced the UK so far this year. That has probably helped Britain avoid a sharper downturn this year. | But as this chart show, the eurozone’s growth rate caught up in 2016, and outpaced the UK so far this year. That has probably helped Britain avoid a sharper downturn this year. |
| #UKGDP out today pic.twitter.com/8YJJLGkPkJ | #UKGDP out today pic.twitter.com/8YJJLGkPkJ |
| 7.57am BST | 7.57am BST |
| 07:57 | 07:57 |
| UK GDP preview: Another poor quarter of growth? | UK GDP preview: Another poor quarter of growth? |
| Good morning. We’re about to discover how well Britain’s economy is performing in the face of Brexit uncertainty, rising inflation and persistently weak productivity. | Good morning. We’re about to discover how well Britain’s economy is performing in the face of Brexit uncertainty, rising inflation and persistently weak productivity. |
| The first estimate of UK GDP for the July to September period, due at 9.30am BST, will show how quickly, or slowly, the economy expanded in the last quarter. | The first estimate of UK GDP for the July to September period, due at 9.30am BST, will show how quickly, or slowly, the economy expanded in the last quarter. |
| It may not be a great picture either; economists predict that GDP rose by just 0.3% during the quarter, significantly below the long-term trend growth. | It may not be a great picture either; economists predict that GDP rose by just 0.3% during the quarter, significantly below the long-term trend growth. |
| The annual growth rate could also drop to just 1.5% - again, rather weaker than in recent years. | The annual growth rate could also drop to just 1.5% - again, rather weaker than in recent years. |
| 2017 hasn’t exactly been a vintage year for the UK economy. GDP only rose by 0.3% in both the first and second quarter, partly due to a slowdown in the dominant service sector. | 2017 hasn’t exactly been a vintage year for the UK economy. GDP only rose by 0.3% in both the first and second quarter, partly due to a slowdown in the dominant service sector. |
| Having been one of the fastest-growing advanced economies in recent years, Britain has actually been the slowest-growing G7 nation so far this year. | Having been one of the fastest-growing advanced economies in recent years, Britain has actually been the slowest-growing G7 nation so far this year. |
| #UK growth was ahead of G7 economies one year ago, but has now fallen behind as #Brexit prospects are hurting the economy pic.twitter.com/pUXQ0KDhi8 | #UK growth was ahead of G7 economies one year ago, but has now fallen behind as #Brexit prospects are hurting the economy pic.twitter.com/pUXQ0KDhi8 |
| Worth mentioning on the day of Boris' "let the lion roar" speech, parliament's economic briefing showed UK had lowest GDP growth in G7 pic.twitter.com/tmG3ADRpkj | Worth mentioning on the day of Boris' "let the lion roar" speech, parliament's economic briefing showed UK had lowest GDP growth in G7 pic.twitter.com/tmG3ADRpkj |
| Today’s healthcheck on the UK economy is particularly important, as chancellor Philip Hammond weighs up what tax and spending changes to make in November’s budget. | Today’s healthcheck on the UK economy is particularly important, as chancellor Philip Hammond weighs up what tax and spending changes to make in November’s budget. |
| It will also influence whether the Bank of England decides to raise interest rates at its monetary policy meeting next week. | It will also influence whether the Bank of England decides to raise interest rates at its monetary policy meeting next week. |
| Sam Hill, senior UK economist at Royal Bank of Canada, fears that Britain’s growth rate could fall to just 0.2%, as there are signs that the service sector actually shrank in July. | Sam Hill, senior UK economist at Royal Bank of Canada, fears that Britain’s growth rate could fall to just 0.2%, as there are signs that the service sector actually shrank in July. |
| He says: | He says: |
| However, it is far from clear whether or not the preliminary estimate of Q3 GDP will reveal growth of 0.2% q/q or 0.3% q/q. Our long-standing forecast has been 0.2% q/q, which we will stick with following news of a contraction in the services sector in July. | However, it is far from clear whether or not the preliminary estimate of Q3 GDP will reveal growth of 0.2% q/q or 0.3% q/q. Our long-standing forecast has been 0.2% q/q, which we will stick with following news of a contraction in the services sector in July. |
| It is also highly probable that, even with a recovery in September, for the quarter as a whole the construction sector will end up being a drag on growth. Against those headwinds, industrial production has been on a much better footing in Q3, so the overall growth estimate will depend on the extent to which the services sector rebounded in August and September. | It is also highly probable that, even with a recovery in September, for the quarter as a whole the construction sector will end up being a drag on growth. Against those headwinds, industrial production has been on a much better footing in Q3, so the overall growth estimate will depend on the extent to which the services sector rebounded in August and September. |
| City traders are bracing for some drama at 9.30am -- a weak GDP report could send the pound sliding. | City traders are bracing for some drama at 9.30am -- a weak GDP report could send the pound sliding. |
| Lukman Otunuga, research analyst at forex broker FXTM, explains: | Lukman Otunuga, research analyst at forex broker FXTM, explains: |
| Overall, October is shaping up to be a painful trading month for Sterling, especially in light of deteriorating economic fundamentals and slow progress on Brexit talks weighing heavily on the currency. | Overall, October is shaping up to be a painful trading month for Sterling, especially in light of deteriorating economic fundamentals and slow progress on Brexit talks weighing heavily on the currency. |
| Inflation in the U.K. has jumped to a five-and-a-half year high at 3%, while wage growth remains subdued. With households feeling the squeeze as wage growth continues to fall behind inflation, concerns remain elevated over the sustainability of the U.K.’s consumer-driven economic growth. | Inflation in the U.K. has jumped to a five-and-a-half year high at 3%, while wage growth remains subdued. With households feeling the squeeze as wage growth continues to fall behind inflation, concerns remain elevated over the sustainability of the U.K.’s consumer-driven economic growth. |
| Updated | Updated |
| at 8.16am BST | at 8.16am BST |