UK growth estimates for Q3 2015 revised down
31st December 2015 | News
The national economy grew by 0.4 per cent in Q3 2015, according to figures from the Office for National Statistics (ONS), lower than initial forecasts of 0.5 per cent.
This drop has been attributed to the key services sector, which accounts for well over 70 per cent of UK economic activity, and grew slower than had previously been thought.
In annual context, growth in Q3 2015 was revised down to 2.1 per cent from the ONS’ previous estimate of 2.3 per cent. Nevertheless, the UK economy has now been growing for 11 successive quarters.
A spokesman for the HM Treasury said in a statement that the figures show that there are still many risks out there for the British economy despite it being “the fastest growing economy in the G7 last year”.
“We’re leading the pack with the US this year, we have a record-high employment rate and the deficit is down,” said the Treasury.
Simon French, chief economist at Panmure Gordon, said the figures added to the picture of a fragile economy.
“It’s been a bad 24 hours for the Chancellor with bad public sector borrowing numbers [revealed last week].
“It is the fourth of seven quarters where the ONS growth estimate overestimated the strength of the economy.”
Figures for the service sector in October – the first month of Q4 2015 – only grew by 0.1 per cent, suggesting that fourth-quarter GDP made a slow start.
Across the Atlantic, US economic growth was also revised down before the festive period, but has actually raised interest rates for the first time in nine years, deeming its central bank to be strong enough to withstand an increase in borrowing costs.
However, the Bank of England is widely expected not to follow the American’s lead until well into 2016.
A new poll of Scottish SMEs by MHA MacIntyre Hudson found that many bosses are anticipating an interest hike in the first half of the year.