British third quarter growth slows
Thursday, 20 December 2007 10:40Britain's economy grew 0.7% in the third quarter, according to official data published today.
The Office for National Statistics said in a third and final estimate that the economy slowed from the 0.8% recorded in the second quarter largely because production industries did not grow at all.
On a year-on-year basis, gross domestic product (GDP) grew 3.3% during the three months to September, the ONS added. The annual reading was slightly higher than the previous estimate of 3.2%, while the quarterly figure was unchanged.
Meanwhile, Britain's current account deficit hit a record high of £20 billion sterling in the third quarter, equivalent to 5.7% of GDP, more official data shows.
Public sector net borrowing, meanwhile, hit a record high of £11.208 billion in November as government expenditure outstripped receipts, putting pressure on British finance minister Alistair Darling's bid to achieve his full-year forecast.
The cash measure, PSNCR, stood at £8.937 billion, around £1.5 billion higher than a year earlier.
The huge rise in the Q3 current account deficit is likely to put further pressure on sterling in the medium-term and is a result of a big rise in the deficit on income as well as trade in goods.
The GDP breakdown, meanwhile, revealed consumer expenditure rose by 1.1% in the third quarter, the fastest rate since the second quarter of 2006. The savings ratio fell to 3.4% from 4%.
But policymakers are much more worried about risks to growth further ahead as the turmoil in financial markets drags on and is expected to tighten credit conditions.
