Britain’s economic recovery loses steam
Britain's economic recovery slowed more than expected in the three months to September after a slump in construction, raising the prospect that more than two years of relatively rapid economic growth is coming to an end.
The economy grew 0.5pc in the third quarter, official figures show - a respectable rate by historic standards but below the 0.7pc seen in the second quarter and economists' expectations for the third. Year-on-year growth fell to a two-year low of 2.3pc, after recording its fastest growth since 2005 last year at 2.9pc, outstripping all other major advanced economies.
Earlier this month the International Monetary Fund forecast growth for 2015 overall would slow to 2.5pc. That would still be faster than most developed nations and around Britain's historic average.
Many economists viewed yesterday's figures as consistent with this type of modest slowdown - rather than heralding a sharper contraction linked to China's stock market turmoil - and financial markets' reaction to the data was muted.
"The UK economy's momentum has begun to ease in light of increasing uncertainty and a weaker global environment, as we expected, but remains decent," Barclays economists said in a note to clients.
Growth was almost entirely driven by Britain's dominant services sector, which picked up pace from the second quarter, while manufacturing shrank for a third quarter in a row. (Reuters)