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UK growth revised up slightly but still sluggish

Oscar Williams-Grut
Senior City Correspondent, Yahoo Finance UK
On going construction work at the Design District site in Greenwich Peninsula in London, United Kingdom on 15th August, 2019. Photo: Claire Doherty/In Pictures via Getty Images

UK economic growth was slightly better than first thought in the third quarter but still sluggish, official statistics confirmed on Friday.

The Office for National Statistics (ONS) said UK GDP grew by 0.4% between the second and third quarter of 2019. GDP grew by 1.1% in the third quarter on an annual basis, the joint worst annual growth since 2012.

Friday’s numbers were the final verdict on how the economy performed in the third quarter. An earlier estimate of the July to September period said GDP grew by 0.3% quarter-on-quarter and 1% compared to the same period a year earlier.

While the growth figures were slightly revised upwards, the ONS said the underlying data showed “signs that there is an underlying slowing in the UK economy.” The statistics body blamed “high levels of domestic and global uncertainties,” namely the US-China trade war and Brexit.

“More timely estimates show that the UK economy was flat in the three months to October 2019, reflecting the recent underlying slowing in the services industry and falls in output of the production and construction industries over this three-month period,” the ONS said.

The manufacturing, services, and construction sectors have all been cutting back on activity this year, leaving private sector spending to pick up the slack and drive economic growth.

Business investment was flat in the third quarter and up just 0.5% on an annual basis, the ONS said.

The statistics body also published public finance data on Friday. Public sector net borrowing was £4.8bn in November, against a forecast of £5.6bn, and the third quarter UK current account deficit was £15.8bn. The deficit was slightly lower than economists’ expectations of a £16bn hole in public accounts and the smallest quarterly current account gap since 2012.