The UK economy moved out of a recession at a record pace in the third quarter ahead of the second nationwide lockdown, 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 contractions of 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.
“It’s a bit of a cliche to say that GDP data is ‘old news’ on arrival, but this has arguably never been more true than in the case of the UK’s third-quarter figures, which show a 15.5 percent quarter-on-quarter recovery over the summer months,” James Smith, an ING economist, said.
The economist expects the latest lockdowns to leave the size of the UK economy some 15 percent below pre-virus levels, as of November.
In order to support the pandemic-hit economy, the Bank of England has expanded its quantitative easing measure, and the government extended its furlough scheme until the end of March.
The ONS said the economy shrank 9.6 percent on a yearly basis 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 remained below pre-crisis levels.
The expenditure-side breakdown showed that 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’s pre-crisis 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.
Underpinned by the contribution from professional, scientific and technical activities, the index of services registered a monthly growth of 1 percent in September. In the third quarter, services output advanced by a record 14.2 percent.
Although construction output grew 2.9 percent, this was the slowest in the current sequence of growth. In the third quarter, output surged by a record 41.7 percent.
Industrial production gained 0.5 percent driven by all sectors of growth. Manufacturing grew 0.2 percent led by transport equipment. In the three months to September, total production climbed 14.3 percent.
Separate data from ONS showed that labor productivity, as measured by output per hour, increased 3 percent in the third quarter from the same period last year. On a quarterly basis, output per hour grew 5.2 percent.
Further, the ONS reported that the visible trade deficit widened in September due to the rebound in imports. The goods trade gap rose to GBP 9.35 billion from GBP 6.83 billion in August.
Export growth improved to 3.3 percent from 1.4 percent a month ago. Meanwhile, 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.
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