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UK GDP growth confirmed at 0.6% in Q3; current account deficit at 2-year high

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UK GDP growth confirmed at 0.6% in Q3; current account deficit at 2-year high

The U.K.'s economy expanded by 0.6% in the third quarter, following a 0.4% growth in the prior quarter, with the services sector contributing the most growth, data from the Office for National Statistics showed.

The third-quarter growth was consistent with a previous forecast and the Econoday consensus estimate.

Third-quarter services output growth was revised up to 0.5% from the prior estimate of 0.4%. Household spending rose by 0.5%, while business investment fell by 1.1%, revised up by 0.1 percentage point from the earlier estimate. This marks the third consecutive quarterly decline in business investment.

Year over year, the U.K. economy expanded by 1.5%, unrevised from the prior estimate.

The data "reinforces the view that there was a temporary slowdown in the first quarter of the year, in which real GDP grew by an unrevised 0.1%, reflecting to some extent the effects of the adverse weather conditions," the Office for National Statistics said.

Separate data from the agency showed that the U.K.'s current account deficit worsened to £26.5 billion, or 4.9% of GDP, in the third quarter from a revised £20.0 billion, or 3.8% of GDP, in the second quarter. This marks the largest deficit recorded since the third quarter of 2016, owing to worsening primary income, trade and secondary income balances.

The total trade in goods deficit widened by £400 million to £35 billion as imports rose by £3.3 billion against an increase of £2.9 billion in exports. The primary income balance deficit worsened by £3.6 billion to £11.1 billion, the largest deficit recorded since the second quarter of 2016, owing to a rise in the profits generated by overseas investors on their U.K. foreign direct investment.