Household consumption growth was unchanged at 0.5 percent in the third quarter, boosted by spending on miscellaneous goods, particularly other financial services, while spending on transport fell, in particuler on motor cars. In addition, net external demand contributed positively to the GDP growth as the trade deficit narrowed to £6.5 billion from £6.8 billion in the previous period. Exports of goods and services jumped 1.1 percent (vs -1.4 percent in Q2) and imports rose at a slower 0.8 percent (vs 0.1 percent in Q2).
Gross capital formation (GCF) – which includes gross fixed capital formation (GFCF), changes in inventories and acquisitions less disposal of valuables – added 0.2 percentage points. GFCF rose 0.5 percent in the third quarter, reversing a 0.8 percent fall in Q2; while business investment shrank 1.1 percent on Brexit uncertainty, marking the third straight quarter of contraction, which has not been seen since the global financial crisis.
From the production side, construction output growth picked up further to 2.3 percent in the three months to September from 0.5 percent in the second quarter following a weak start to the year that was affected by the heavy snowfall; while quarterly output in the manufacturing sector rose 0.4 percent, after two consecutive quarters of declines. Growth in services output slowed to 0.5 percent from 0.6 percent, following a strong summer, in part driven by buoyant food and drink sales as consumers took advantage of the warmer weather and the World Cup.