2020.11.1207:00:00UTC+00UK Economy Rebounds In Q3

The UK economy moved out of recession at a record pace in the third quarter following the continued easing of lockdown restrictions, the Office for National Statistics reported Thursday.

Gross domestic product grew 15.5 percent sequentially in the third quarter, which was the biggest expansion seen since records began in 1955.

Economists had forecast an expansion of 15.8 percent after decreasing 19.8 percent in the second quarter and 2.5 percent in the first quarter.

Nonetheless, the level of GDP was 9.7 percent below where it was at the end of 2019.

James Smith, an ING economist said he expects the latest lockdowns to leave the size of the UK economy some 15 percent below pre-virus levels, as of November.

On a yearly basis, the economy shrank 9.6 percent in the third quarter versus an expected fall of 9.4 percent.

Output in the services, production and construction increased by record amounts in the third quarter but the level of output remained below pre-crisis level.

Household consumption surged 18.3 percent driven by higher spending on restaurants and hotels and transport. Government consumption grew 7.8 percent, reflecting the increase in activity in health and education.

Gross fixed capital formation advanced 15.1 percent as dwellings investment picked up by 71.2 percent in the third quarter. Business investment gained 8.8 percent.

The UK posted a trade surplus of 0.9 percent of nominal GDP in the third quarter, a narrowing from the 3.6 percent recorded in the second quarter.

In September, GDP grew 1.1 percent, marking the fifth consecutive rise. However, it remained 8.2 percent below the February 2020 level.

The monthly path of GDP revealed that there has been a slowdown of growth in August and September as momentum has eased through the quarter.

Industrial production gained 0.5 percent from August and manufacturing grew 0.2 percent. The index of services registered a monthly growth of 1 percent and construction output was up 2.9 percent.

In a separate communiqu?, the ONS said the visible trade deficit widened to GBP 9.35 billion in September from GBP 6.83 billion in August.

Exports growth improved to 3.3 percent from 1.4 percent a month ago. At the same time, imports logged a sharp expansion of 10.2 percent, reversing a 1.9 percent fall in August.

The total trade in goods and services showed a surplus of GBP 613 million compared to a GBP 2.85 billion surplus posted in the previous month.