MNI DATA IMPACT: UK GDP Plunges in Dec, Q4 Expands Modestly>

By Irene Prihoda and Laurie Laird

     LONDON (MNI) - The UK economy averted recession in the third 

quarter, but growth fell short of expectations and was concentrated 

wholly in July. 

The following are the key points from third quarter GDP data published 

Monday by the Office for National Statistics. 

     - Gross domestic product expanded by 0.3% between July and 

September, falling just short of expectations. The economy grew by just 

1.0% over the month of 2018, the slowest pace since Q1 2010. 

     - The resilient headline figure obscured a marked softening over 

the latter months of the quarter. GDP slipped by 0.1% in September, 

extending a 0.2% monthly fall in August. Output expanded by just 0.9% 

q/y in the year to September, the weakest growth since June 2012.    

     - The services sector expanded by 0.4% in the third quarter, 

unchanged from Q2, accounting for 0.4 percentage points of total growth. 

However, services exerted downward pressure on the wider economy toward 

the end of the quarter, recording no change in September after a 0.1% 

monthly fall in August. 

     - Household spending continues to support economic growth, rising 

by 0.4% in Q3, matching Q2's rise. Consumer spending added 0.25pp to 

GDP. 

     - Business investment steadied between Q2 and Q3, defying 

predictions of a 0.5% decline. However, investment data were flattered 

by a 9.4% increase in information and technology spending, adding 1.2pp 

to total business investment. 

     - Manufacturing extended its slump, recording no change in Q3. The 

sector has expanded in only two of the past seven quarters, 

     - The construction sector rebounded modestly, rising 0.6% in Q3, 

partially reversing a 1.2% decline in Q2, adding 0.04pp to total growth. 

     - The trade deficit declined dramatically to Stg6.410 billion from 

Stg11.394 billion, adding 1.22pp to GDP growth. However, a 3.9% jump in 

imports led to a marked widening of the trade gap to Stg3.360 billion in 

September, the biggest shortfall since May.    

-London bureau: 44 (0) 203 865 3812; email: ukeditorial@marketnews.com 

[TOPICS: M$B$$$,MABDS$,MAUDR$]