UK Third Quarter GDP Growth Highest Since 2010

on October 25 2013 7:12 AM
London's Big Ben
London's Big Ben Reuters

The UK recorded its strongest growth in the last three years in the third quarter of 2013, with a quarterly growth of 0.8 percent that was in line with expectations and higher than a 0.7 percent quarterly rise in the June quarter, indicating resilience in the third-largest economy in Europe.

On a yearly basis, gross domestic product, or GDP, grew 1.5 percent in the third quarter, same as in the previous quarter and as predicted by analysts, a preliminary estimate from UK National Statistics on Friday showed.

“While the first GDP estimate is timelier in the UK than overseas, it seems likely that the UK recorded the fastest growth amongst the G7 in Q3 – at last, some compensation for many years of underperformance,” Samuel Tombs, UK economist at Capital Economist, said in a note.

However, GDP continues to stay below pre-recession levels, while a fall in real income, a credit crunch and a dull recovery in the euro zone weigh down UK’s growth momentum.

On Thursday, Bank of England Governor Mark Carney announced reforms to the central bank's liquidity provisions, offering banks cash and collateral at cheaper rates and for longer periods. He added that the central bank will also accept a wider range of assets in exchange.

“These reforms do not represent an easing of monetary policy and they are not designed to help banks now, who already have ample liquidity thanks to the Funding for Lending Scheme (FLS) and quantitative easing (QE),” Tombs said.

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