UK's recovery starts to slow, eurozone weakness a factor

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UK's recovery starts to slow, eurozone weakness a factor

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Britain’s rapid economic recovery is showing signs of easing.

In the three months up to September services output growth slowed and manufacturing expanded at the weakest pace in 18 months.

The latest figures from the Office for National Statistics reveal gross domestic product expanded by 0.7 percent between July and September

That was down from 0.9 percent in the previous quarter.

Economists were not surprised as few expected that growth rate would be sustained and Britain still looks set to be the best performing advanced economy this year.

Finance minister George Osborne welcomed the data but said growth could slow further because of external factors.

“The UK is not immune to weakness in the euro area and instability in global markets, so we face a critical moment for our economy,” he said.

The immediate outlook for overseas demand is unpromising. Industry surveys show exporters have suffered from Europe’s slump, and this – rather than the latest GDP data – may have more bearing on when the Bank of England raises rates.

With few signs of inflationary pressure and growing risks from the eurozone, most of the UK central bank’s policymakers opposed raising interest rates from their record low 0.5 percent, according to minutes from their October meeting.

with Reuters