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Free AccessMNI DATA ANALYSIS: Q3 GDP Confirmed At +0.4% Q/Q>
-UK Q3 Current Account Deficit falls to Stg22.784bn from Stg25.821bn
-UK Q3 Business Investment +0.5% vs +0.2% in previous estimate
-UK Q3 Net Trade exerts neutral effect vs -0.5pp previously
By Laurie Laird and Jamie Satchithanantham
London (MNI) - UK growth accelerated modestly in the third quarter,
confirming earlier estimates, while annual growth was revised higher,
with business investment and trade both putting in a stronger
performance than estimated a month ago.
Gross domestic product expanded by 0.4% in the third quarter,
matching the MNI median forecast, unchanged from the outturn reported a
month ago.
On an annual basis, output rose by 1.7%, exceeding the MNI median
forecast, topping the 1.5% gain reported in the second estimate of GDP.
There were no revisions to growth over the first or second
quarters, with the economy expanding at 0.3% over both periods.
But growth over 2016 was upgrade by 0.1 percentage point, rising by
1.9% over 2015.
Meanwhile, the current account deficit narrowed in the third
quarter, falling to Stg22.784 billion, compared to the MNI median
forecast of Stg21.0 billion, from Stg25.821 in the second quarter.
That took the shortfall to 4.5% of GDP from 5.1% in the second
quarter.
However household spending was a bit less robust than previously
reported, rising by 0.5% in the third quarter, down from the
previously-reported 0.6% gain, up from growth of 0.2% in the second
three months of the year, accounting for 0.3 percentage points of total
growth.
That took the savings ratio to 5.2%, down from 5.6% in the second
quarter. However, on the non-financial account, which includes outlays
for large capital transactions, net borrowing rose to Stg2.348 billion
from Stg195 million in the second quarter. That's the fourth straight
quarter of net household borrowing, the longest stretch since records
began in 1987.
Business investment continued to hold up in the wake of the Brexit
vote, rising by 0.5% in the third quarter, up from 0.2% gain reported
last month, adding 0.1 percentage points to total growth. On an annual
basis, business investment increased by 1.7% in the third quarter,
exceeding the originally-reported 1.3% advance.
Over the third quarter of 2016, external trade provided less of a
drag than reported a month ago. Exports rose by 0.8% over the second
quarter, while imports rose by 0.9%. As a result, net trade exerted a
neutral effect on total growth, a dramatic improvement on the 0.5
percentage point drag included in the second estimate of GDP.
Government spending fell by 0.2%, down sharply from the
originally-reported 0.3 percentage point gain, exerting a neutral
influence on growth. The dramatic revision stems from a decrease in the
volume of healthcare provision, combined with a statistical adjustment
to balance the various measures of gross domestic product.
The dominant service sector growth expanded by at 0.4% in the third
quarter, matching the gain estimated last month, contributing 0.3
percentage points to total growth.
In the month of October, service output expanded by 0.2% over
September and by 1.2% over the same month of 2016, according to a
separate report released on Friday.
In the three months to October, the service sector rose by 0.3%
over the previous three-month period, increasing by 1.3% over the same
period of year earlier, the weakest annual growth since the three months
to October of 2013.
The other output components of the economy were both stronger than
initially reported in the third quarter.
Industrial output expanded by 1.3% in the third quarter, exceeding
from the previously-reported 1.1% gain, adding 0.2 percentage points to
total growth. The upgrade stems from revisions to value-added-tax
receipts in previous periods and seasonal adjustment factors.
The construction sector contracted by 0.5%, better than the 0.9%
slump reported a month ago, exerting a neutral effect on total output.
-London bureau: 44 (0) 203 865 3812; email: ukeditorial@marketnews.com
To read the full story
Sign up now for free trial access to this content.
Please enter your details below.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.