The Office for National Statistics (ONS) today released the UK’s gross domestic product (GDP) figures for July to September, which find that increased output in the production and services industries has boosted national economic growth.
The ONS reports that output of the production industries increased by 0.5 per cent in Q3, compared with a fall of 1.2 per cent in the previous quarter, while service industries output jumped by 0.7 per cent in the period, up from 0.2 per cent. Services accounts for more than three quarters of the nation’s total GDP.
Overall, GDP in volume terms increased by 0.5 per cent in 2011 Q3 compared with 2010 Q3, the ONS says.
Many commentators had feared that the economy had stagnated in the past quarter, with many predicting smaller growth numbers of about 0.2 per cent.
But the ONS statements says the interpretation of the estimate for Q3 is ‘complicated by the special events’ earlier in the year including the additional bank holiday in April for the royal wedding that are ‘likely to have depressed activity’ in that quarter.
‘As with 2010 Q4 and 2011 Q1 (affected by the bad weather in Q4) it may be wise to look at 2011 Q2 and 2011 Q3 together, rather than separately,’ the statement says. ‘On that basis GDP has grown by 0.6 per cent in the last two quarters and by 0.5 per cent in the last year.’
Notably, the ONS says that there is ‘no evidence’ that the widespread riots across many cities in England in August had ‘any significant impact’ on GDP for Q3.
Early last month, the ONS announced that GDP growth had been revised down. Initial official statistics showed that the economy grew by 0.2 per cent between April and June – a headline figure which chancellor George Osborne described as ‘ positive news’ – but that figure was cut to 0.1 per cent.
Commenting on the preliminary figures for the third quarter of 2011, David Kern, chief economist at the British Chambers of Commerce, says, ‘The figures for Q3 are better than expected, though they follow particularly disappointing 0.1 per cent growth in the previous quarter, which was affected by special factors.
‘Over the last year growth has been relatively weak at only 0.5 per cent, but it is reassuring that fears of a recession have so far been unfounded. There are still risks ahead. Early indications from the fourth quarter are concerning, and if the situation in the Eurozone worsens there could be serious adverse repercussions for the UK.’