Tuesday, October 26, 2010

UK economy grows twice as fast as expected in Q3, +0.8 pct qq

LONDON: Britain's economy grew twice as fast as expected in the third quarter of this year, official data showed on Tuesday, Oct 26, dimming the chance of more quantitative easing from the Bank of England in the near term.

However, growth is still expected to slow next year as government spending cuts bite, value-added tax rises and the rebound in CONSTRUCTION [] activity is likely to wane.

The Office for National Statistics said Britain's economy grew 0.8 percent between July and September, a quarter of which was due to the construction sector, which represents barely 6 percent of the economy.

Analysts had forecast growth of 0.4 percent on the quarter -- one third the rate seen in the first three months of the year.

On the year, GDP grew by 2.8 percent -- the fastest annual rate in three years and up from 1.7 percent in the previous quarter.

The statistics office said the third quarter was the first this year not to have been distorted by weather-related effects which depressed output in the first quarter and boosted i t in the second.

Annual construction ouput growth of 11 percent was the highest since the first quarter of 1988.

Services growth held steady at 0.6 percent on the quarter but industrial output growth slowed to 0.6 percent from 1.0 percent in the previous quarter. - Reuters

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