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The UK economy avoids recession with growth in the third quarter



An employee working on an engine production line at a Ford plant January 13, 2015

Carl Court | Getty Images News | Getty Images

The UK economy has avoided slipping into a technical recession, according to official data on Monday, gross domestic product in the third quarter (GDP) showed 0.3%.

The data indicate a downturn in Q2 Gross Domestic Product (GDP) which fell by 0.2%.

Annual growth in the third quarter slowed to 1

%. This marked the slowest expansion rate since the first three months of 2010.

On a month-to-month measurement, GDP in September marked only 0.1% contraction. September production data revealed a contraction of 0.4% from August and a 1.8% decline from September 2019.

Both figures were affected less than a consensus of forecasts gathered by Reuters.

September service output was flat at 0.0% month-on-month and up 1.3% year-on-year. This month's industrial production and construction activity also fell from the August figures.

There was very little initial reaction in trading of pounds versus dollars. Just before the decision, sterling traded at $ 1.2804 and this dipped to $ 1.2797 after the data fall.

Speaking to CNBC's Street Signs on Monday, Ross Walker, head of UK and European economics at Natwest Markets, said the numbers were "a little disappointing."

Walker said there had been modest growth in sales of retail sales, and he had hoped this could lead to some more growth.

"Underlying growth in the UK is clearly below the trend," he said before adding that when we accounted for Brexit-related fluctuations in production, the data looked "a little lukewarm."

Last week, the Bank of England said that trend growth in the UK is currently roughly half that of 2018.


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