ONS revises up GDP growth from 0.3% to 0.4% but warns of slowdown signs
The British economy grew at a faster rate than initially thought in the three months to the end of September, according to official figures.
The Office for National Statistics revised upwards its growth estimate for gross domestic product from 0.3% to 0.4%.
The snapshot suggests that growth in GDP, the broadest measure of economic prosperity, recovered more strongly than first thought, after the first quarterly fall since 2012 in the preceding three months.
Although painting a rosier picture for the third quarter of the year, the ONS said the underlying momentum in the UK economy continued to show signs of slowing.
“Despite some revisions in this publication, the overall narrative has remained relatively unchanged,” it said.
The ONS said its quarterly assessments of the economy had proven more volatile than normal, as companies shifted the timing of their activities in preparation for Brexit deadlines. This made its estimates more prone to revision than usual, it added. The third quarter was partly overshadowed by the 31 October Brexit deadline, which was ultimately extended by Boris Johnson and the EU.
Economists said Brexit uncertainty would probably persist throughout next year, weighing on the economy, reflecting concerns over the possibility of another cliff edge at the end of the transition period next December. Boris Johnson has left the option of a no-deal departure on the table, saying he aims to strike a trade deal with the EU before the end of 2020.
Separate figures from the ONS also showed government borrowing continued to rise last month, as public expenditure was ramped up.
The budget deficit – the gap between tax revenue and government spending – was about £300m higher in November than the same month a year ago, at £5.6bn. Although the figures paint a gradual deterioration in the strength of the public finances, the rise in borrowing was not as large as expected by City economists, who had forecast a deficit of about £6.3bn.
The data comes as Sajid Javid, the chancellor, prepares to loosen restrictions on government spending after last week’s general election. Borrowing has increased over the first eight months of the financial year by more than 10% compared with the same period in 2018, to stand at about £50.9bn.