UK Economy Grows 0.7% in Third Quarter as Energy Prices Bite
The UK economy grew by 0.7% in the third quarter, in line with forecasts, despite a sharp rise in fuel and natural gas prices.
The UK economy grew by 0.7% in the third quarter, the Office for National Statistics (ONS) reported. The growth rate matched analysts' forecasts, despite a noticeable rise in energy prices that had been holding back activity throughout the period.
The growth covered the period from July to September. According to the ONS, gross domestic product increased by 0.2% in September compared with the previous month. This monthly gain provided notable support for Chancellor of the Exchequer John Healey, for whom such figures offer an additional argument in favour of the government's course amid pressure from economic problems.
The main risk factor in recent months has been the energy shock. Prices for petrol, diesel and natural gas rose sharply after the conflict in the Middle East escalated. The rise in energy costs hit household budgets and business expenses, yet, according to the statistics, consumers and companies remained resilient and continued to spend and invest.
Nevertheless, energy costs still constrained growth during the quarter. Without such pressure, the economy could have shown stronger momentum, although precise estimates of the impact of prices were not set out in the data.
The outlook remains uncertain. The trajectory of oil and gas prices in the coming months is unclear, and the timeframe over which pressure on energy markets will persist has not been established. This factor will apparently determine whether the British economy can sustain its current growth rate in the following quarters.
Source: theguardian.com
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