Britain’s economic growth slowed in the third quarter, lagging other G7 group countries

Britain’s economy grew by 1.3% in the third quarter vs forecasted expansion of 1.5% that marks the slowest quarterly growth since the country was under lockdown in early 2021.
The GDP data signal that economic recovery slowed and was behind the other countries of G7 group of rich nations in the third quarter.

Weaker than expected figures also add to Bank of England’s existing dilemma about the interest rates, after the central bank shocked many who were expecting the first rate hike in November’s policy meeting, by keeping the rates unchanged, despite its forecast that inflation would hit 5%, almost more than double central bank’s 2% target.

British economy also remains 2.1% smaller compared to the pre-pandemic period at the end of 2019 and below other G7 countries, such as Germany, France and Italy.

Monthly figures showed that the GDP fell more than expected in July and grew slightly in August, while September’s 0.6% growth was more significant and reflecting a boost from easing restriction after the summer wave of coronavirus, when the economy was hit by new wave of Covid-19 infections, global supply chain problems and shortage of workers.

The GDP growth in September was boosted by stronger output in the health sector, as people started to visit their doctors after pandemic, leading the 0.7% rise in services sector, but the overall picture was soured by 0.4% drop in the industrial output, mainly due to contraction in gas distribution, which extended into fourth consecutive month.

Separate data showed that Britain’s trade deficit widened by 9 billion pounds to 42.3 billion pounds in the third quarter, driven by fall in exports and rise in imports from EU and non-EU countries.