The UK economy has grown at its fastest rate since 2016, a new study has revealed.
The figures, published by the Office for National Statistics (ONS), show that gross domestic product (GDP) grew by 0.6 per cent in the three months to September, with “warm weather” boosting spending over the summer months.
It represents the highest quarterly growth figure since the fourth quarter of 2016, when the economy grew by 0.7 per cent.
Growth was strongest during July, coinciding with warm weather and the 2018 World Cup. Figures dipped slightly throughout August and September, however, potentially signifying things to come.
When broken down sector by sector, the services industry – which makes up around three-quarters of the UK economy – grew by 0.3 per cent. Construction grew by 2.1 per cent after a slow start to the year, while household spending grew by 0.5 per cent. Business investment shrank by 1.2 per cent over the same period.
Experts believe that continued tension between the UK and the European Union and uncertainty around a final Brexit deal is causing consumers to spend less and businesses to hold off on investment until a clearer picture of the UK’s economy can be observed.
Commenting on this month’s figures, Suren Thiru, Head of Economics at the British Chambers of Commerce (BCC), said: “While the pick-up in GDP growth in the third quarter is welcome, the stronger headline figure masks a loss of momentum through the quarter from the particularly strong July outturn, when a number of temporary factors, including the heatwave and the World Cup, boosted activity.”
Mr Thiru added that, against this backdrop, the Bank of England (BoE) may postpone decisions to raise interest rates until a Brexit deal has been set in stone.
“With inflation on a downward trajectory and the UK’s growth outlook subdued, there remains sufficient scope for the central bank to keep interest rates on hold for some time yet. To ease the extent of current uncertainty, the government must deliver a comprehensive Brexit deal that gives firms the clarity and precision they need.”