Econ­omy grows by 0.6% but cracks be­gin­ning to emerge

The Press and Journal (Aberdeen and Aberdeenshire) - - FRONT PAGE - BY ALYS KEY

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

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