UK economic growth slowed in the third quarter amid supply chain issues, according to figures released on Thursday by the Office for National Statistics.
GDP grew 1.3% between July and September, down from 5.5% in the second quarter and missing expectations for 1.5% growth. That leaves quarterly GDP 2.1% below where it was in the last quarter of 2019, before the pandemic hit.
GDP growth for July was revised down from a 0.1% drop to a 0.2% decline, while August’s was revised to 0.2% growth from 0.4%.
On a monthly basis for September, GDP grew 0.6%, which was ahead of the 0.4% increase expected.
Grant Fitzner, chief economist at the ONS, said: “Growth picked up in September and the UK economy is now only slightly below pre-pandemic levels.
“This latest increase was led by the health sector, boosted by more visits to GP surgeries in England.
“Lawyers also had a busy month as house buyers rushed to complete purchases before the end of the stamp duty holiday.
“However, these were partially offset by falls in both the manufacture and sale of cars.
“Notably, business investment remained well down on pre-pandemic levels in the three months to September.”
Paul Dales, chief UK economist at Capital Economics, said: “The big point is that the best of the recovery is now behind us. And we think progress is going to slow over the next six to nine months as shortages remain an issue and the real spending power of businesses and households is reduced by higher taxes and rising utility prices.
“This won’t prevent the Bank from raising interest rates from +0.10% (perhaps in December), but we think it will contribute to rates going no higher than 0.50% next year.”
