UK recovery loses momentum, services sector drags
Date
10/26/2014 3:37:09 AM
(MENAFN– ecpulse) Britain`s economic recovery remained weak in the second quarter this year amid the ongoing weakness in Britain`s backbone services sector.
The London-based Office for National Statistics (ONS) revealed on Friday the preliminary reading of the Gross Domestic Product (GDP), showing a slower pace of growth during the third quarter amid growing obstacles to recovery in shades of the fragility of euro zone economies.
The GDP preliminary reading showed a 0.7% expansion in the UK economy during the third quarter compared to the growth of 0.9% in the three months ended June. Year-on-year, UK economic growth eased to 3.0% with the previous reading of 3.2% in the same period a year ago but came in line with expectations.
In fact, the economic weakness seen in euro zone countries - the UK`s largest trading partners - is reflected negatively on the performance of the UK economy.
In the minutes of their last meeting, policymakers at the Bank of England (BoE) expressed their concerns regarding the consequences of the euro-area economic slowdown upon the UK.
Two of the BoE’s Monetary Policy Committee (MPC) voted for an early raise for interest rates from its low historical levels at 0.5% at the last meeting, while the consensus of members preferred to leave the size of the asset-purchasing facility at 375 billion pounds.
At 9:05 GMT, the British pound rose against the dollar to 1.6085 compared with the opening levels of 1.6028. Simultaneously, the euro dropped against the sterling pair also dropped to 0.7879 compared with the opening levels of 0.7886.
Zooming into the report, we can see that the service sector expanded by 0.5% compared to 1% growth during the second quarter, as the business and financial services growth slowed 1% against 1.5% in the past three months ending June.
On the other hand, the index of services for August saw no change compared with 0.2% growth a month and well below analysts` median forecast of 0.3% growth
The thee-month index for services rose 0.8% in August, coming below 1.0% growth seen in July, which slightly below 0.9% analysts’ forecasts.
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.