Strong UK growth confirmed; non-oil output 1.6% below peak in Q3
Simon Ward
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UK GDP is provisionally estimated to have risen by 0.8% in the third quarter versus a forecast here of growth of about 1%. Initial estimates tend to be revised up when the economy is accelerating – the increases in the first and second quarters have already been raised by 0.1 percentage points each (i.e. from 0.3% to 0.4% and from 0.6% to 0.7% respectively).
GDP in September alone was 0.3% above the quarter average, based on official estimates of sectoral output levels. Ignoring revisions, this implies that GDP would grow by 0.3% in the fourth quarter even if output levels were to stagnate after September; a more likely scenario of monthly expansion of 0.25% would produce another quarterly rise of 0.8%.
GDP growth of 1.5% combined in the second and third quarters has been driven by the private sector. Output of “government and other services” rose by only 0.3%, contributing a tiny 0.07 percentage points to the GDP increase.
GDP last quarter was still 2.5% below the peak in the first quarter of 2008 but this partly reflects a fall in North Sea oil and gas production – non-oil output was 1.6% below peak in the third quarter, with the shortfall likely to decline below 1% this quarter.
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