UK Q3 GDP beats estimates, rises 0.5 percent on strong services sector

Data released by the Office for National Statistics on Thursday showed that UK Q3 GDP grew by 0.5 percent, beating forecasts for 0.3 percent growth. Growth was however, slower than the 0.7 percent recorded in the second quarter.

Details of the report showed that the third-quarter figure was driven by a strong performance in the dominant services sector, which expanded by 0.8 percent. However, the other four sectors — industrial production, construction and agriculture — all contracted.

"The first estimate of GDP growth in the third quarter was “a million miles from the zero or negative readings that we feared when survey indicators fell off a cliff after the Brexit vote,” said Alan Clarke of Scotiabank.

Economists still expect growth to slow over the next few months as rising inflation and weak earnings growth are expected to reduce consumers’ spending power which has been an important contributor to recent growth. Medium- and long-term outlook for the U.K.'s gross domestic product remain fragile.