LONDON, NOV 1 - The Economy grew by 0.5 percent in the third quarter of this year, driven by the strongest growth in business services and finance in four years, official data showed on Tuesday.
However, a separate survey showed that the manufacturing sector shrank at the sharpest rate in over 2 years in October, with the Purchasing Managers' Index falling more than even the most pessimistic analyst had forecast.
KEY POINTS FROM THE ONS RELEASE:
- Business services and finance posted their strongest quarterly growth since the third quarter of 2007
- The ONS said there was no evidence that the riots in major English cities in August have any significant impact on Q3 GDP
- The ONS gave no estimate by how much Q3 GDP had been boosted from a mere rebound from the special factors that hit growth in the second quarter.
- In a separate release the ONS said services output increased by 0.3 percent over the month in August.
KEY POINTS FROM THE PMI RELEASE
- lowest PMI reading since June 2009
- lowest PMI new orders component since March 2009
SIMON HAYES, BARCLAYS CAPITAL
We did expect a temporary rebound from Q2 because there were some there were some temporary factors weighing on growth.
Normally we would consider a rate of 0.6 to be consistent with an environment of stable employment. If you bear in mind that the ONS estimate was 0.5, with temporary factors weighing on growth. Given that, we should have expected a starting point of 0.5. This does imply that the underlying Q3 rate was actually zero. The underlying situation is one of barely any growth and continuing increases in unemployment