UK economy’s growth has been stunted

A smaller than anticipated growth in the UK economy has come as no surprise to the British Chambers of Commerce (BCC).

The GDP growth figure in Q3 of 2015 was initially forecast to be 0.5 per cent but was downgraded to 0.4 per cent when figures were released on Wednesday.

Figures published by the Office for National Statistics (ONS) revealed that business investment had risen by 2.2 per cent on the quarter and 5.8 per cent on the year.

The ONS added that weaker growth in the services sector, especially in financial services, was behind the new growth assessment.

The UK’s current account was £17.5bn in Q3, unchanged from Q2, but within that figure, the trade deficit in current prices widened from £4.7bn in Q2 to £8.7bn in Q3.

“It is not hugely surprising to see GDP growth downgraded slightly, in line with the revisions in our own forecast earlier this month,” said David Kern, the BCC’s Chief Economist.

“However it is concerning that it is the weaker growth in our dominant services sector has played a part.

“Given the weakness in our manufacturing sector, our services sector will still be expected to drive economic growth as we enter 2016.

“The sharp widening of the trade deficit will provide little festive cheer. Our exporters will need all the help they can get in order to redress this – and improved access to finance for those looking to export would be a good first step.”

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