Q3 UK GDP – enough bright spots to maintain resilient growth

Q3 UK GDP – enough bright spots to maintain resilient growth

Rob Morgan, Chief Investment Analyst at Charles Stanley Direct, part of Raymond James

“Despite higher energy costs, the uncertainty of the impending Budget, and the expectation of higher interest rates building, the UK economy remained robust in the third quarter, adding to the steady expansion recorded earlier in the year.

“The economy isn’t necessarily resilient across the piece, but there’s enough bright spots to keep it ticking over at a decent clip. Notably services sector, buoyed in part by artificial intelligence build out, is in rude health. Meanwhile, construction is weak and parts of the consumer economy such as retail, hospitality, and leisure face a more challenging backdrop as household spending comes under renewed pressure.

“Whether the economy to be upwardly mobile rests significantly on geopolitical events that are dictating energy and fuel costs and shaping wider consumer sentiment. An impending leap in energy bills is already in the pipeline for the new year, meaning the traditionally strong first quarter could see more strain.

“The latest figures do nothing to alter the conclusion that the Bank of England will continue to be more worried about inflation than weak growth. For households, this suggests a further squeeze as mortgage and other borrowing rates could remain elevated for longer than many had hoped.”