UK GDP drop was led mainly by the services sector – Rabobank

FXStreet (Delhi) – Stefan Koopman, Research Assistant at Rabobank, note that after having increased by only 0.5% in Q3, UK GDP fell 0.1%-point short of expectations and clearly slowed from the more buoyant 0.7%-rate registered in Q2.

Key Quotes

“The services industry continues to be the main driver of economic growth, expanding by a healthy 0.7% on the quarter. This was also enough to offset the slump in the somewhat erratic construction sector (-2.2%).”

“Manufacturing, on the other hand, got another hit (-0.3% this time) due to the strong sterling and Chinese-related concerns. This marked the third consecutive quarter of contraction and further increases the risk that the UK economy becomes overly reliant on the services industry.”

“Unfortunately, business surveys already indicate that the services sector has started to cool off in Q4, even though domestic demand currently benefits from a supportive inflationary environment – a situation that cannot last forever.”

Stefan Koopman, Research Assistant at Rabobank, note that after having increased by only 0.5% in Q3, UK GDP fell 0.1%-point short of expectations and clearly slowed from the more buoyant 0.7%-rate registered in Q2.

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