UK: Economic momentum fading despite solid third quarter - ING

According to James Smith, Developed Markets Economist at ING, at 0.6%, the latest UK growth for the third quarter indicates the economy moved up a gear over the summer.

Key Quotes

“The underlying details show much of this was driven by consumption, helped along considerably by persistently warm weather. There was also some better news for investment; it fell in the first two quarters of the year but grew by 0.8% in the third.” 

“Overall there’s little doubt the economy had a better run over the summer. But now that the sunnier weather is behind us, we think this stronger momentum will begin to fade. There has already been some evidence of this in the latest PMIs, which indicate Brexit uncertainty may be beginning to weigh more heavily on activity.”

“”We still think there is a clear risk that we won’t know for sure that ‘no deal’ has been avoided until next year.”

“So we think the economy has a challenging few months ahead of it, and we expect to see fourth-quarter growth to slow to around 0.3%.”