UK Eco­nomic Growth Hits Two-Year High

Iran News - - INTERNATIONAL -

LON­DON (Dis­patches) - The UK econ­omy ex­panded at the fastest pace in two years dur­ing the third quar­ter, but has be­gun show­ing signs of a slow­down ahead of Brexit as more busi­ness in­vest­ment de­ci­sions are put on hold.

In what is likely to be a peak for the econ­omy this year, the lat­est snap­shot from the Of­fice for Na­tional Sta­tis­tics (ONS) showed GDP growth in the three months to the end of Septem­ber was 0.6% – the fastest ex­pan­sion since the fi­nal quar­ter of 2016.

But growth has be­gun to fal­ter as the boost to the econ­omy from the warm weather over the sum­mer and Eng­land’s per­for­mance at the World Cup has fiz­zled out.

GDP growth flat­lined in Au­gust and Septem­ber, with signs of weak­ness in busi­ness spend­ing, re­tail sales and a fall in do­mes­tic car pur­chases.

City econ­o­mists had fore­cast growth of 0.1% in Septem­ber, al­though the UK econ­omy un­ex­pect­edly stag­nated for the sec­ond month in a row, as new car regis­tra­tions fell by a fifth in the worst Septem­ber for the mo­tor trade in a decade.

Al­though there are gather­ing signs of weak­ness as the coun­try braces for Brexit on 29 March next year, on an an­nual ba­sis, the Bri­tish econ­omy grew by 1.5%.

Philip Ham­mond, the chan­cel­lor, said on a visit to the Fuller’s brew­ery in Lon­don just two weeks af­ter the bud­get that the growth rate was “proof of the un­der­ly­ing strength in our econ­omy”.

There are how­ever mount­ing signs of un­der­ly­ing weak­ness as Theresa May strug­gles to agree a Brexit deal with the EU, and busi­ness in­vest­ment dropped at the fastest rate since early 2016. The lat­est fig­ures re­veal a con­trac­tion in cor­po­rate spend­ing of 1.2% dur­ing the third quar­ter, which was the first time busi­ness in­vest­ment has slipped for three con­sec­u­tive quar­ters since the global fi­nan­cial cri­sis a decade ago. Azad Zan­gana, se­nior Euro­pean econ­o­mist at the City fund man­ager Schroders said con­cerns over Brexit were among the rea­sons for busi­nesses de­lay­ing in­vest­ment de­ci­sions.

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