Economy grows by 0.6% but cracks beginning to emerge
The UK economy grew by 0.6% during the third quarter, but cracks are beginning to show as consumers cut back on spending.
The Office for National Statistics said that the figure represents the fastest quarterly growth since the final quarter of 2016, when the economy grew by 0.7%.
Growth was primarily driven by strong retail sales during the World Cup and a recovery in construction in July, when monthly Gross Domestic Product was 0.3% higher.
August and September were both flat, confirming economists’ fears that the heatwave’s boost to the economy faded towards the end of the summer.
Growth in construction and manufacturing output picked up in the third quarter following a weak start to the year, when building projects were delayed by adverse weather.
Output in the construction industry was 2.1% higher in the period, the fastest increase since the first quarter of 2017. Meanwhile, output from the services industries, which include retail, eased to 0.4% compared to 0.6% in the second quarter.
Motor trade services fell by 1.9%, the weakest quarterly growth rate since the final quarter of 2012.
But car manufacturing increased, helping to improve the UK’s trade balance.
The total trade deficit narrowed by £3.2 billion to £2.9bn. Cars had the biggest impact on the balance of goods imports and exports due to a £1bn rise in non-EU exports and a £1.7bn fall in EU imports.
Consumer spending drop