Preliminary data suggests that the UK economy grew by 0.8% in the third quarter of the year. This level of growth is the fastest rate seen since the second quarter of 2010. The Bank of England is suggesting that UK third quarter growth may be the fastest in the G7 economies. The Governor of the Bank of England, Mark Carney pointed out that growth was: "towards the top end of the advanced economies", but "coming from a very, very low base".
The data was presented by the Office for National Statistics (ONS) and follows on from growth of 0.7% seen in Q2. ONS characterised the Q3 data as showing a “fairly strong” performance across all sectors of the UK economy. The construction sector saw growth of 2.5% in Q3, again (pardon the pun) building on growth in Q2. The sector has been volatile in recent quarters, so two successive quarters of growth might be indicative of a sustained rally in the sector. The UK’s controversial “Help to Buy” scheme has certainly helped builders, but some analysts fear that in the longer run the plan will fuel a housing bubble.
The ONS figures show that production rose by 0.5% in Q3, but (to underline Mark Carney’s comment) it is still lagging 12.8% off its 2008 level. Within the overall production data, manufacturing increased by 0.9% in Q3. The UK economy is dominated by the service sector and this enjoyed growth of 0.7% - meaning that it is now 0.4% above the pre-crisis level in 2008. Alternatively, the figure shows that the Global Financial Sector has cost the service sector five years of growth.
The Q3 data is subject to two revisions as more data becomes available, giving a more accurate picture of the economic situation.