London, Oct 27 (IANS) Britain’s economic growth slowed more than expected in the third quarter, hit by the biggest construction slump in three years and a manufacturing sector mired in recession, the Office for National Statistics (ONS) said on Tuesday.
Gross Domestic Product (GDP) grew by 0.5 percent in the three months from July to September, down from 0.7 percent in the previous three months. Most economists were forecasting 0.6 percent, The Guardian reported.
“The third quarter slowdown, and warning lights from recent business surveys about the weakness intensifying in September, suggests that policymakers will want more time to assess the extent of the slowdown as we move into the fourth quarter, effectively postponing any rate hikes until next year,” Chris Williamson, chief economist at economic pollsters Markit, said.
The service industries continue to be the main driver of growth, rising 0.7 percent – the strongest performance since the end of 2014. The construction sector shrank 2.2 percent, however, and factory output dropped by 0.3 percent, marking the third quarter of contraction.
Overall industrial output benefited from a bounce in oil production, as there were fewer maintenance shutdowns than in previous years.
The ONS said that the unusually wet weather in August may have been a factor behind the construction slump, and its quarterly estimate assumed the sector bounced back with 1.3 percent growth in September.
Manufacturing has been affected by cooling global demand – especially from China and other emerging markets – exacerbated by the strong pound.
Growth had bounced back strongly in the second quarter after an increase of just 0.4 percent from January to March.