UK Economic Growth For Q3 2011 Revised Slightly Upwards

UK Economy 'Bounced Back' In Third Quarter

The UK economy ground to a halt in the second quarter of the year, revised figures revealed today, but bounced back between July and September with stronger growth than previously estimated.

Gross domestic product (GDP) grew at 0.6% in the third quarter, revised up from a previous estimate of 0.5%, the Office for National Statistics (ONS) said, while growth between April and June was slashed to zero from 0.1%.

The third quarter was boosted by better than estimated growth in agriculture, construction and services, while the second quarter was hit by weaker than estimated figures in the services sector.

Economists have warned the third quarter was flattered as the economy played catch-up from the previous three months, which was hit by the extra bank holiday from the royal wedding and impact of the Japanese tsunami, so the overall picture of the year has been left broadly unchanged by the revisions.

Chris Williamson, chief economist at financial services information company Markit, said: "The underlying trend is very clearly one of an economy that is struggling in the face of what seems to be an ever-growing list of headwinds."

The tax and spending watchdog, the Office for Budget Responsibility, recently slashed official forecasts for growth, following a similar downbeat assessment of the economy from the Bank of England.

The powerhouse services sector, which makes up some 75% of the total economy, grew at 0.7% in the third quarter, up from a previous estimate of 0.6%. Agriculture grew at 0.5% in the third quarter, while construction was ahead 0.3%.

The squeeze on household spending was underlined by figures revealing real disposable income growth slowed to 0.3% in the third quarter from 1.3% the previous three months.

Government spending was also revised down to 0.2% from 0.9% - which corresponds more closely with Chancellor George Osborne's programme of deficit-busting spending cuts.

Labour Treasury spokeswoman Rachel Reeves said: "These revised figures show an unchanged picture over the last year. The British economy has been flatlining over the last 12 months, when we need strong growth to get unemployment and the deficit down.

"Instead of ploughing on with failed policies, they should listen to the IMF, change course and get a real plan for jobs and growth that will get the deficit down in a fairer, better way."


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