UK economic growth data to provide short-term cheer but long-term clouds remain
A preliminary read of the UK’s economic growth figures for July to September will be released today.
Quarter three GDP growth is expected to come in at about 0.6%. This signals an improvement from the preceding quarter, where growth notched 0.4%, and a major turnaround from the first quarter’s near flatline-rate of 0.2%. If quarter three growth clocks in at 0.6%, the UK will see its highest rate of growth this quarter since the fourth quarter of 2016 (0.7%).
Although the UK faces the same long-term economic problems it faced last quarter—namely, a business investment and manufacturing slowdown due to uncertainties over Brexit—an increase in consumption has spurred the anticipated uptick in growth over the past three months.
However, these improved numbers do not mean by any stretch that the UK economy is in a comfortable state at the moment. The latest data on GDP growth among G7 countries indicates, for example, that the UK is far below the average member state growth rate of 2.05%. The core of the problem is investor and manufacturing uncertainty over Brexit. Expect unpredictable growth rates in at the next two quarters, preceding the next major Brexit deadline of March 29.
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