U.K. economic growth likely to have decelerated in Q3

The U.K. economic growth is expected to have slowed in the third quarter in sequential terms. The first estimate of every quarter’s economic growth is derived from the economy’s output side. There are hard data for both construction and production output for the months of August and July.

If output for those sectors are assumed to have been flat in September, then the suggested contributions to the growth in the third quarter would have been -0.04 percentage points and -0.10 percentage points, respectively, stated Societe Generale in a research note. Both the sectors contributed 0.30 percentage points and -0.01 percentage points, respectively in the second quarter.

This might suggest a slowdown in growth of 0.43 percentage points in the third quarter, if services growth remained the same from the second quarter to third quarter. But, the services growth is believed to have decelerated slightly in the third quarter to 0.5 percent quarter-over-quarter from 0.6 percent in the second quarter. This might suggest that the overall growth in the gross value added dropped to below 0.3 percent in the third quarter from 0.8 percent in the second quarter, added Societe Generale.