- Chris Williamson at research group Markit
The British economy expanded by 1% between July and September, as country's households increased their spending at the fastest pace in more than two years during the third quarter that included the Olympic Games. At the same time the economy contracted 0.1% from a year ago, whereas the previous estimate had shown tepid growth. According to the Office for National Statistics, household spending added 0.6%, while investment spending soared 3.7%.
In the meanwhile, services sector grew by 1.3%, yet the expansion of industrial production was revised down to 0.9% from 1.1%. Despite the fact that the economy overcame recession, there is still a risk of contraction in the upcoming months.
"Indeed, with the fading of the Olympic boost likely to weigh on GDP in the fourth quarter, the [Bank of England's] monetary policy committee has said that it is braced for a contraction – which is what we expect. A triple dip looms," Vicky Redwood, UK analyst at Capital Economics, said Tuesday.
"If anything, the details in the new data further highlight the temporary nature of the upturn," said Chris Williamson at research group Markit. "Payback is likely in the fourth quarter."
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