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UK economy flatlines in third quarter after modest growth in September

The UK economy flatlined in the third quarter, although it managed to eke out modest growth in September, better than economists had expected.

Figures from the Office for National Statistics (ONS) showed monthly real gross domestic product (GDP) grew 0.2% in September, following growth of 0.1% in August, which was revised down from growth of 0.2% before.

Economists had projected zero growth in September.

But looking at the broader picture, GDP showed no growth in the three months to September, although economists had forecast a contraction of 0.1%.

Samuel Tombs at Pantheon Macroeconomics said: "The economy narrowly avoided contracting in Q3, and we continue to think that it can maintain this resilient performance in Q4.

"We continue to think that the chances of a recession look low; we look for a 0.3% quarter-on-quarter increase in GDP in Q4 and expect that pace to be broadly maintained next year," he added.

Services output rose by 0.2% in September, driven by growth in professional, scientific and technical activities, and human health and social work activities, and was the main contributor to the growth in GDP; this follows growth of 0.3% in services output in August, revised down from growth of 0.4%.

Output in consumer-facing services fell by 0.2% in September after a decline of 0.7% in August, revised down from a fall of 0.6%.

Production output showed no growth in September after falling by 0.5% in August, revised up from a fall of 0.7%.

The construction sector grew by 0.4% in September after a fall of 0.8% in August, revised down from a decline of 0.5%.

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