UK shows growth in Q3

>GDP ex­pands by 0.5% de­spite fears of Brexit vote shock, says poll

The Sun (Malaysia) - - SUNBIZ -

LONDON: Bri­tain’s econ­omy barely slowed in the third quar­ter de­spite the Brexit vote shock, fur­ther di­min­ish­ing the chance of a fresh in­ter­est rate cut by the Bank of Eng­land next week.

Gross Do­mes­tic Prod­uct (GDP) ex­panded by 0.5% in the July-Septem­ber pe­riod, less rapid than the un­usu­ally strong growth of 0.7% seen in the sec­ond quar­ter but com­fort­ably above a me­dian fore­cast of 0.3% in a Reuters poll of econ­o­mists.

Com­pared with the third quar­ter of last year, growth picked up to 2.3%, the strong­est pace in more than a year, ac­cord­ing to the pre­lim­i­nary fig­ures from the Of­fice for Na­tional Sta­tis­tics (ONS).

“There is lit­tle ev­i­dence of a pro­nounced ef­fect in the im­me­di­ate af­ter­math of the vote,” ONS chief econ­o­mist Joe Grice said, adding that growth was in line with the pat­tern since 2015.

Sup­port­ers of Brexit are likely to say the fig­ures back the claims they made dur­ing the ref­er­en­dum cam­paign that warn­ings of a big hit to Bri­tain’s econ­omy from a vote to leave the EU were lit­tle more than scare­mon­ger­ing.

The stronger-than-ex­pected growth in the third quar­ter was only due to the coun­try’s dom­i­nant ser­vices sec­tor which saw rapid growth in film and tele­vi­sion pro­duc­tion and dis­tri­bu­tion. The ONS linked the pick-up to strong box-of­fice re­ceipts in July when the lat­est re­leases in the Ja­son Bourne and Star Trek se­ries hit the screens along with other block­busters.

The fig­ures pro­vide the first broad es­ti­mate of the size of the hit to Bri­tain’s econ­omy from the ref­er­en­dum de­ci­sion in June to leave the Euro­pean Union.

Many econ­o­mists orig­i­nally ex­pected a “Leave” vote to push the econ­omy quickly into a shal­low re­ces­sion. – Reuters

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