UK Q3 preliminary GDP +0.7% vs +0.7% q/q expectedPrior +0.5%UK Q3 preliminary GDP +1.9% vs +1.9% y/y expectedPrior +1.4%
The quarterly report falls in line with estimates as the UK economy shows much resilience in growing by 0.7% on the quarter with annual growth of 1.9% in Q3.
The breakdown shows that it is the services sector that is pulling the weight here, contributing 0.77% to three-month GDP growth. Production accounted for another 0.01% contribution, with construction being a drag with a negative contribution of -0.04%. At the balance, that sees the UK economy grow by 0.7% (rounded) in the three months to September.
The September monthly report shows that the economy is holding up in wrapping up the third quarter, despite fears of more uneven growth conditions before that.
As such, that will allow the BOE to keep majority their focus on the inflation battle as economic conditions point to some resilience at least for now. With markets pricing in roughly 71% odds of another rate hike in December, the GDP figures today will do little to dissuade that and keep traders locked in for another potential move by the central bank before year-end.
This article was written by Justin Low at investinglive.com.