British economy grows 0.8 percent in third quarter

24th November 2010, Comments 0 comments

Britain's economy expanded by a robust 0.8 percent in the third quarter compared with the previous three months, helped by a pick-up in trade, official data showed Wednesday.

Gross domestic product (GDP) growth climbed by 2.8 percent between July and September compared with the third quarter in 2009, the Office for National Statistics said in a statement.

All the data was unchanged from the initial estimates published by the ONS last month.

The ONS added that the deficit in net trade fell to 9.7 billion pounds in the July-September period, compared with 10.9 billion in the second quarter, as exports rose faster than imports.

The GDP data has soothed fears of the possibility of a double-dip recession triggered by the British government's dramatic public spending cuts after the country's economy managed to emerge from a record-length recession late last year.

However, economists warn that the British government's austerity measures could still hamper the nation's fragile economic recovery.

"It is good news that GDP growth in the third quarter was confirmed at a resilient 0.8 percent quarter-on-quarter," said IHS Global Insight's Howard Archer.

"Nevertheless, it remains likely that growth will lose significant momentum over the coming months as the fiscal tightening increasingly bites and adds to the pressures on already stretched consumers."

And other experts added that the ONS could yet revise the crucial GDP figures.

"The second estimate of third-quarter GDP may, on the surface, appear largely positive," said HSBC economist Andrew Grantham.

"However, past experience has shown that the expenditure figures can be revised heavily by the time of the third release, and the net trade data contained in this second estimate of GDP certainly appears at odds with the monthly trade statistics."

© 2010 AFP

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