Economy grows, but manufacturing slips
The economy continued to grow strongly between July and September, according to the latest estimates from the UK's leading macro-economic think-tank.
GDP expanded by 0.8 per cent in the third quarter, the National Institute of Economic and Social Research (NIESR) said. If that is confirmed by official figures later this month, it would represent the economy's strongest quarterly growth since the Coalition took office in 2010.
But the NIESR estimate is still weaker than the 1 per cent quarterly growth suggested by recent industry surveys. That represents a slight decline on the 0.9 per cent expansion it estimated for the three months to August.
Enthusiasm over the UK's recovery was further dampened yesterday by news that manufacturers stumbled in August with a fall in production. The 1.2 per cent month-on-month decline contrasted with City forecasts of a modest increase. The data showed industrial output down 1.1 per cent. Industry surveys, by contrast, had pointed to the fastest pace of growth in the sector in nearly two decades last month.
The news caught currency markets off guard, sending the pound down around 0.7 per cent against the dollar. Trade figures also disappointed the markets yesterday, as the UK's goods deficit with the rest of the world edged down to £9.6bn. Economists had anticipated a bigger decline.
Howard Archer of IHS Global Insight called the figures a "reality check" that raised the risk net trade held back the wider economy between July and September.
"It does put a dent into hopes that the economy may have grown by as much as 1 per cent in the third quarter," he added.
That was echoed by Lena Komileva, managing director of G+ Economics, who said: "The plunge in industrial production has put a major question mark over the UK economic recovery."
The Bank of England's latest credit-conditions survey said lenders expect demand for loans from businesses of all sizes to pick up in the final quarter of the year. But smaller companies are still missing out on cheaper loans as large and medium companies enjoy "significant reductions" in lending spreads compared with "slight" falls for small businesses.
NIESR reckons Britain's GDP remains 2.5 per cent below its peak.
- 1 Forget 'The Dress': Here are five of the biggest news stories you might have missed
- 2 The black and blue dress: Makers considering a white and gold version
- 3 Prince Harry leaving the armed forced to pursue conservation projects in Africa
- 4 PornHub turns masturbation into energy in bid to save the planet
- 5 The remarkable archaeological underwater discovery that could open up a new chapter in the study of European and British prehistory
Boris Nemtsov shot dead: Outspoken Putin critic who had expressed fears for his life is killed near the Kremlin
Leonard Nimoy dead: Star Trek Spock actor dies after suffering lung disease
PornHub turns masturbation into energy in bid to save the planet
Ukraine crisis: Top Chinese diplomat backs Putin, says West should 'abandon zero-sum mentality'
White and gold or blue and black – what colour is the dress? An eyewitness gives a definitive answer
New theory could prove how life began and disprove God
Half of Ukip voters say they are prejudiced against people of other races
'Cash for access' scandal: Sir Malcolm Rifkind says 'unrealistic' for MPs to live on £67,000 salary
This is what it's like to be dead, according to a guy who died for a bit
'Jihadi John': CAGE representative storms off Sky News accusing Kay Burley of Islamophobia
Aqsa Mahmood branded a 'disgrace' by her parents after claims she recruited three UK girls flying to Middle East
iJobs Money & Business
£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...
£30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...
£250-£300 Day Rate: Jemma Gent: Are you a qualified accountant with strong exp...
£230 - £260 Day Rate: Jemma Gent: Do you want to stamp your footprint in histo...