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UK GDP Growth Climbs To 0.4% In Q3, NIESR Estimates

The UK growth improved in the third quarter of this year, yet the economy expanded less than the other major industrial economies such as the Euro Area and the US, the National Institute of Economic and Social Research (NIESR) said Tuesday.

Output grew by 0.4 percent in the third quarter versus 0.3 percent increase in the previous three months, the think tank said, citing its monthly estimates of GDP.

"Although economic growth is likely to be a touch stronger in the second half of this year compared with the first, it is important to note that activity has slowed since last year and this at a time when real GDP growth in other major economies such as the Euro Area and the USA has strengthened," Amit Kara, head of UK macroeconomic forecasting at NIESR, said.

"Looking ahead, we expect the pattern of demand in the UK economy to rebalance towards international trade in response to strengthening global growth and weaker sterling and away from domestic demand."

While the NIESR had not expected Bank Rate to be changed before February 2018 during its August forecast, recent comments from the Bank of England point to a rate increase as early as next month, Kara noted.

"If forthcoming data releases show that CPI inflation has risen again and the labor market remains buoyant, there is a strong chance that the Bank of England will raise the policy rate in November, thereby reversing some of the emergency stimulus that was injected into the economy in response to the EU referendum result," he added.

by RTT Staff Writer

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