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| UK growth hits near two-year high, but business investment shrinks again - live updates | UK growth hits near two-year high, but business investment shrinks again - live updates |
| (about 1 hour later) | |
| Here’s a round-up of how the UK growth figures are being reported: | |
| Reuters: UK economy grows strongly in third quarter, with hints of tougher times ahead | |
| Britain’s economy kept up healthy momentum during the third quarter, but this may prove a high watermark ahead of Brexit, official figures showed on Friday. | |
| Gross domestic product in the three months to September was 0.6 percent higher than in the previous quarter, matching the consensus forecast in a Reuters poll of economists, figures from the Office for National Statistics (ONS) showed. | |
| Compared with a year earlier, the economy stood 1.5 percent larger. | |
| But in September alone, it stagnated for a second month running, compared with forecasts for a rise of 0.1 percent. | |
| Financial Times: UK economy grows at fastest rate since 2016 | |
| The UK economy accelerated to its fastest quarterly growth rate in almost two years over the summer but economists warned that with Brexit uncertainties curbing spending, the performance would soon decline. | |
| Daily Telegraph: Strong summer sales fade as economy slows into autumn | |
| Economic growth hit its highest pace since 2016 as GDP surged 0.6pc in the third quarter of the year on stronger manufacturing and construction growth. | |
| Annual growth accelerated to 1.5pc, up from 1.2pc three months ago. | |
| But there are already signs the acceleration has faded, with most of the improvement coming in July and growth petering out by September. | |
| The Times: Sunny summer helped economy to fastest growth for two years | |
| The British economy grew by a perky 0.6 per cent in the third quarter, its fastest for two years, but the positive number was soured by a third successive quarter of falling business investment. | |
| The Office for National Statistics said that the growth in total output compared to the second quarter was the fastest performance since the first quarter of 2016, when the economy surged by 0.7 per cent. | |
| Cheerfulness fuelled by England’s showing in the World Cup and the sunny weather pushed up retail sales and a recovery in construction in July produced a surge in the economy in the first month of the period. August and September were both flat, however, confirming concerns that the impetus has been fading. | |
| Here’s our news story on today’s growth figures: | Here’s our news story on today’s growth figures: |
| Andy Scott, associate director at independent financial risk management consultancy JCRA, also fears the UK is now slowing: | Andy Scott, associate director at independent financial risk management consultancy JCRA, also fears the UK is now slowing: |
| “The latest GDP figures show that the unexpectedly hot and sunny Summer has encouraged consumers to spend more on eating and drinking out, while Sterling weakness has helped to boost trade. By contrast, investment contracted sharply, suggesting that companies are preparing for a weaker economy by scaling back on spending, with implications for GDP growth as well as the labour market. | “The latest GDP figures show that the unexpectedly hot and sunny Summer has encouraged consumers to spend more on eating and drinking out, while Sterling weakness has helped to boost trade. By contrast, investment contracted sharply, suggesting that companies are preparing for a weaker economy by scaling back on spending, with implications for GDP growth as well as the labour market. |
| With a Brexit deal still hanging in the balance, we expect the economy to slow in the current quarter, as businesses and consumers brace themselves for the eventuality that no solution is found for the Irish border issue. The overall picture of the UK economy is however, one of resilience. With unemployment at multi-decade lows and wages accelerating, the robust levels of household spending should continue to act as a buffer against weakening sectors such as manufacturing, preventing the economy from stalling or worse, contracting. | With a Brexit deal still hanging in the balance, we expect the economy to slow in the current quarter, as businesses and consumers brace themselves for the eventuality that no solution is found for the Irish border issue. The overall picture of the UK economy is however, one of resilience. With unemployment at multi-decade lows and wages accelerating, the robust levels of household spending should continue to act as a buffer against weakening sectors such as manufacturing, preventing the economy from stalling or worse, contracting. |
| It’s official: the government can organise a photo op in a brewery..... | It’s official: the government can organise a photo op in a brewery..... |
| Here’s the ONS’s take on the growth figures: | Here’s the ONS’s take on the growth figures: |
| Today we’ve released our latest set of #GDP figures for Q3 2018. Commenting on the figures Head of GDP Rob Kent-Smith said: https://t.co/ROsP0NPAsB pic.twitter.com/ALt3kh0oub | Today we’ve released our latest set of #GDP figures for Q3 2018. Commenting on the figures Head of GDP Rob Kent-Smith said: https://t.co/ROsP0NPAsB pic.twitter.com/ALt3kh0oub |
| The UK can claim to have been one of the faster-growing advanced economies this summer. | The UK can claim to have been one of the faster-growing advanced economies this summer. |
| The eurozone, for example, only expanded by 0.2% in July-September, with Italy not managing any growth at all. Even France, which should have enjoyed its own World Cup boost, only grew by 0.4%. | The eurozone, for example, only expanded by 0.2% in July-September, with Italy not managing any growth at all. Even France, which should have enjoyed its own World Cup boost, only grew by 0.4%. |
| We get German GDP next Wednesday; some economists fear Europe’s largest economy may have shrunk due to trade war tensions, and a slowdown in its car sector. | We get German GDP next Wednesday; some economists fear Europe’s largest economy may have shrunk due to trade war tensions, and a slowdown in its car sector. |
| Japan is also predicted to have contracted, partly due to earthquake and typhoon disruption. | Japan is also predicted to have contracted, partly due to earthquake and typhoon disruption. |
| Britain hasn’t caught up with America’s strong growth, though.. | Britain hasn’t caught up with America’s strong growth, though.. |
| Here’s what we know so far: | Here’s what we know so far: |
| US: +0.9% quarterly growth in Q3 (or 3.5% on the ‘annualised’ basis used in America) | US: +0.9% quarterly growth in Q3 (or 3.5% on the ‘annualised’ basis used in America) |
| UK: +0.6% quarterly growth | UK: +0.6% quarterly growth |
| France: +0.4% quarterly growth | France: +0.4% quarterly growth |
| Eurozone: +0.2% | Eurozone: +0.2% |
| Italy: Stagnation | Italy: Stagnation |
| Canada: 0.2% growth in July, and 0.1% in August | Canada: 0.2% growth in July, and 0.1% in August |
| TUC General Secretary Frances O’Grady has called on the government to help stop the “worrying fall” in business investment. | TUC General Secretary Frances O’Grady has called on the government to help stop the “worrying fall” in business investment. |
| “The government should set up a National Investment Bank to upgrade Britain’s infrastructure. This would help raise productivity, giving a boost to growth and wages. | “The government should set up a National Investment Bank to upgrade Britain’s infrastructure. This would help raise productivity, giving a boost to growth and wages. |
| Business investment would also benefit from a Brexit deal that doesn’t gum up Britain’s trade links with the EU.... | Business investment would also benefit from a Brexit deal that doesn’t gum up Britain’s trade links with the EU.... |
| Hammond’s claim that Britain’s economy has ‘underlying strength’ really doesn’t match the steady slide in UK business investment this year. | Hammond’s claim that Britain’s economy has ‘underlying strength’ really doesn’t match the steady slide in UK business investment this year. |
| UK business investment not on a particularly encouraging path, notes Nomura's Jordan Rochester. "Brexit uncertainty is exerting a larger negative influence on business investment as we move closer to a deal/no-deal being confirmed." pic.twitter.com/41odH391XS | UK business investment not on a particularly encouraging path, notes Nomura's Jordan Rochester. "Brexit uncertainty is exerting a larger negative influence on business investment as we move closer to a deal/no-deal being confirmed." pic.twitter.com/41odH391XS |
| Worryingly, third consecutive quarter of drop in business investment (Brexit-related paralysis?) means UK less prepared for thriving in post-Brexit era. | Worryingly, third consecutive quarter of drop in business investment (Brexit-related paralysis?) means UK less prepared for thriving in post-Brexit era. |
| The Chancellor of the Exchequer, Philip Hammond, says today’s growth figures show the UK economy’s underlying strength. | The Chancellor of the Exchequer, Philip Hammond, says today’s growth figures show the UK economy’s underlying strength. |
| Speaking on a trip to Fuller’s Brewery in London (nice work if you can get it!), the chancellor hailed the GDP report - even though several economists are warning that the economy is slowing. | Speaking on a trip to Fuller’s Brewery in London (nice work if you can get it!), the chancellor hailed the GDP report - even though several economists are warning that the economy is slowing. |
| Hammond says: | Hammond says: |
| “Today’s positive growth of 0.6% is proof of the underlying strength in our economy. We are building an economy that works for everyone with 3.3 million more people in work, lower unemployment in every part of the country, and wages rising at their fastest pace in almost a decade. Now our focus is on locking in this progress and ensuring people’s wages can continue to rise. | “Today’s positive growth of 0.6% is proof of the underlying strength in our economy. We are building an economy that works for everyone with 3.3 million more people in work, lower unemployment in every part of the country, and wages rising at their fastest pace in almost a decade. Now our focus is on locking in this progress and ensuring people’s wages can continue to rise. |
| “That is why my Budget supports hardworking families by cutting taxes for 32 million people, provides more funding for public services – including a record-breaking funding increase for our vital NHS – and invests in our future with more money for transport and digital technology.” | “That is why my Budget supports hardworking families by cutting taxes for 32 million people, provides more funding for public services – including a record-breaking funding increase for our vital NHS – and invests in our future with more money for transport and digital technology.” |
| The CBI also fears that the UK economy is weakening, despite its sparkling summer. | The CBI also fears that the UK economy is weakening, despite its sparkling summer. |
| Their principal economist, Alpesh Paleja, says: | Their principal economist, Alpesh Paleja, says: |
| “The sun shone on the UK economy over the summer, boosting economic growth relative to the second quarter. | “The sun shone on the UK economy over the summer, boosting economic growth relative to the second quarter. |
| “But as the impact from the warm weather and World Cup fades, we expect subdued growth ahead. Indeed, our surveys for October already paint a picture of weaker momentum. | “But as the impact from the warm weather and World Cup fades, we expect subdued growth ahead. Indeed, our surveys for October already paint a picture of weaker momentum. |
| Will Hobbs, head of investment strategy at Barclays Smart Investor, is also concerned that storm clouds are gathering over the UK economy: | Will Hobbs, head of investment strategy at Barclays Smart Investor, is also concerned that storm clouds are gathering over the UK economy: |
| “We should not be lulled into a false sense of security by a third-quarter that was propped up by a bounce in consumption. | “We should not be lulled into a false sense of security by a third-quarter that was propped up by a bounce in consumption. |
| Incoming private sector confidence surveys tell us very clearly that the sky is darkening a little for the UK as the realities of a hard Brexit start to weigh more visibly on short term private sector decision making. | Incoming private sector confidence surveys tell us very clearly that the sky is darkening a little for the UK as the realities of a hard Brexit start to weigh more visibly on short term private sector decision making. |
| Brexit is clearly to blame for the slide in UK business investment, says analysts at Danke Bank | Brexit is clearly to blame for the slide in UK business investment, says analysts at Danke Bank |
| 🇬🇧#UK business investments fell for the third consecutive quarter (for the first time since the financial crisis). 20% of the UK companies think #Brexit is the key source of uncertainty and as many as 50% have postponed investment decisions due to Brexit $EURGBP pic.twitter.com/ibOzya2c1U | 🇬🇧#UK business investments fell for the third consecutive quarter (for the first time since the financial crisis). 20% of the UK companies think #Brexit is the key source of uncertainty and as many as 50% have postponed investment decisions due to Brexit $EURGBP pic.twitter.com/ibOzya2c1U |
| This pick-up in UK growth won’t last, according to Ana Boata, senior economist at Euler Hermes. | This pick-up in UK growth won’t last, according to Ana Boata, senior economist at Euler Hermes. |
| She fears that growth could halve in the current quarter: | She fears that growth could halve in the current quarter: |
| “The rebound in UK economic growth in Q3 was triggered by a number of temporary factors including contingency planning in light of the uncertainty on the Brexit deal by March 2019. | “The rebound in UK economic growth in Q3 was triggered by a number of temporary factors including contingency planning in light of the uncertainty on the Brexit deal by March 2019. |
| “We expect GDP growth to fall to 0.2-0.3% in Q4 as tightening financial conditions, weaker consumer confidence and more fragile business profitability take their toll on the UK economy. The drag on growth from the Brexit related uncertainty will remain and will hinder investment opportunities. | “We expect GDP growth to fall to 0.2-0.3% in Q4 as tightening financial conditions, weaker consumer confidence and more fragile business profitability take their toll on the UK economy. The drag on growth from the Brexit related uncertainty will remain and will hinder investment opportunities. |
| Here’s confirmation that the sun and the soccer helped drive the UK economy in July. | Here’s confirmation that the sun and the soccer helped drive the UK economy in July. |
| Solar-powered economy grew by 0.6% between July and September - fastest pace since late 2016. Big bounce in July (world cup and sunshine) but “signs of weakness” in September. Households kept spending as business investment fell. What happens next depends on Brexit. pic.twitter.com/RQgiO9exKE | Solar-powered economy grew by 0.6% between July and September - fastest pace since late 2016. Big bounce in July (world cup and sunshine) but “signs of weakness” in September. Households kept spending as business investment fell. What happens next depends on Brexit. pic.twitter.com/RQgiO9exKE |
| Few important things to note about today’s GDP figures. First off, on a monthly basis the economy was actually flat in Aug and Sept. Main thing keeping it strong was a) a relatively strong July and base effects rebounding from a weakish Q2 pic.twitter.com/dztAsGElv1 | Few important things to note about today’s GDP figures. First off, on a monthly basis the economy was actually flat in Aug and Sept. Main thing keeping it strong was a) a relatively strong July and base effects rebounding from a weakish Q2 pic.twitter.com/dztAsGElv1 |
| UK GDP up to 0.6% quarter on quarter in July-September - strongest since Q4 2016. But (and it's a big one), a clear slowdown at end of the quarter, suggesting a weak Q4 on the way. | UK GDP up to 0.6% quarter on quarter in July-September - strongest since Q4 2016. But (and it's a big one), a clear slowdown at end of the quarter, suggesting a weak Q4 on the way. |
| Today's GDP release showed the impact of the slow down in the automotive or car sector as it took 0.11% off GDP growth in September. That was what stopped the Q3 number being 0.7%. | Today's GDP release showed the impact of the slow down in the automotive or car sector as it took 0.11% off GDP growth in September. That was what stopped the Q3 number being 0.7%. |
| The 2.1% rise in ONS construction output in 2018 Q3 compared with Q2 is a rise of £872 million, primarily driven by a £507 million rise in private housing, offsetting the £162 million fall in commercial output.#ukconstruction. pic.twitter.com/0VPxmQfmk9 | The 2.1% rise in ONS construction output in 2018 Q3 compared with Q2 is a rise of £872 million, primarily driven by a £507 million rise in private housing, offsetting the £162 million fall in commercial output.#ukconstruction. pic.twitter.com/0VPxmQfmk9 |
| U.K. GDP up 0.6 % in three months to September. Construction up after terrible year ago comparable, manufacturing slightly up but services growth slows and business investment drops a huge 1:2% | U.K. GDP up 0.6 % in three months to September. Construction up after terrible year ago comparable, manufacturing slightly up but services growth slows and business investment drops a huge 1:2% |
| Better news: Britain’s exporters helped to drive growth up over the summer. | Better news: Britain’s exporters helped to drive growth up over the summer. |
| The ONS says that net trade made the largest positive contribution to GDP growth in the last three months, thanks to a 2.7% rise in exports. Imports were flat. | The ONS says that net trade made the largest positive contribution to GDP growth in the last three months, thanks to a 2.7% rise in exports. Imports were flat. |
| Another blow: business investment fell by 1.2% between Quarter 2 and Quarter 3 2018. | Another blow: business investment fell by 1.2% between Quarter 2 and Quarter 3 2018. |
| This is the sharpest decline since the first quarter of 2016 and marked the third consecutive quarterly fall – which has not been seen since the global financial crisis, the ONS says. | This is the sharpest decline since the first quarter of 2016 and marked the third consecutive quarterly fall – which has not been seen since the global financial crisis, the ONS says. |
| This is likely to be due to the impact of Brexit uncertainty, as firms are reluctant to commit to new factories and offices until they have more clarity. | This is likely to be due to the impact of Brexit uncertainty, as firms are reluctant to commit to new factories and offices until they have more clarity. |
| Update: here’s the chart: | Update: here’s the chart: |
| On an annual basis, the UK economy grew by 1.5% in July-September. | On an annual basis, the UK economy grew by 1.5% in July-September. |
| That’s the best result in a year. | That’s the best result in a year. |
| But the ONS isn’t impressed, saying that the UK continued “its relatively subdued performance over the last year.” | But the ONS isn’t impressed, saying that the UK continued “its relatively subdued performance over the last year.” |