Open

Coming up

Don't miss

Replay


LATEST SHOWS

MEDIAWATCH

Media accused of pro-protester bias in Ferguson

Read more

DEBATE

The Murderous Lure of Jihad: Tackiling ISIS and its Worldwide Recruitment (part 2)

Read more

DEBATE

The Murderous Lure of Jihad: Tackiling ISIS and its Worldwide Recruitment

Read more

FOCUS

Republicans block Obama's bid to hike minimum wage

Read more

WEB NEWS

Calls for ISIS media blackout after execution of James Foley

Read more

WEB NEWS

Web users divided over Darren Wilson

Read more

WEB NEWS

Web users take on 'Ice Bucket Challenge' to fight ALS

Read more

ENCORE!

From Paris's Liberation to 'arresting' art in Avignon

Read more

INSIDE THE AMERICAS

Ferguson riots: Pressure mounts on Obama

Read more

  • US says Islamic State threat 'beyond anything we've seen'

    Read more

  • Two US Ebola patients leave hospital ‘virus-free’

    Read more

  • Hollande is ‘nobody’s president’ says former French minister

    Read more

  • Turkey’s Erdogan names foreign minister Davutoglu as next PM

    Read more

  • US reaches historic $16.7bn settlement with Bank of America

    Read more

  • Special report: Supplying Ukraine’s soldiers on the front line

    Read more

  • US forces tried to rescue slain reporter from IS captors

    Read more

  • Israeli air strike kills three top Hamas commanders

    Read more

  • France delivered arms to Syrian rebels, Hollande confirms

    Read more

  • Tensions high in Yemen as Shiite rebel deadline looms

    Read more

  • Interactive: Relive the Liberation of Paris in WWII

    Read more

  • French village rallies behind besieged elderly British couple

    Read more

  • Former Irish PM Albert Reynolds dies at 81

    Read more

  • Former Femen activist detained after fighting veiled woman

    Read more

  • Thailand coup leader Prayuth Chan-ocha voted prime minister

    Read more

  • Brazil’s Silva launches bid after Campos plane crash death

    Read more

Business

British growth beats expectations

Text by News Wires

Latest update : 2010-10-26

One week after the British government announced a vast austerity plan, official figures for the third quarter show that the UK's economy has grown twice as much as expected but remains slow at 0.8 percent.

AFP - Britain's economy expanded by a surprisingly strong 0.8 percent in the third quarter, official data showed Tuesday, soothing fears of a double-dip recession and sending the pound surging.
  
And on a 12-month basis, the economy grew by 2.8 percent in the third quarter compared with equivalent output in 2009, the Office for National Statistics (ONS) added in a statement.
  
That was the strongest annual reading since 2007.
  
"These numbers will clearly ease near-term concerns over a possible double-dip in the UK economy," said Capital Economics analyst Jonathan Loynes in response to the strong growth in gross domestic product (GDP).
  
The quarterly figure, which was double market expectations, was largely due to major gains in services, construction and production.
  
The data comes one week after Britain unleashed the biggest public spending cuts for decades. Some analysts fear the austerity drive could push the country back into recession.
  
"UK growth provided a major upside surprise in the third quarter," said economist Howard Archer at the IHS Global Insight consultancy in London.
  
"Construction output surged by 4.0-percent quarter-on-quarter and 11.0 percent year-on-year as it extended the surge in activity seen in the second quarter."
  
In reaction, the pound rallied on expectations that it would dissuade the Bank of England (BoE) from pumping more money into the economy via its radical bond-purchasing programme any time soon.
  
Sterling jumped as high as 1.5870 dollars, hitting the highest level since October 20. And it also hit a similar peak at 87.85 pence against the euro.
  
"The unexpectedly sharp jump in UK GDP in the third quarter looks likely to delay a further bout of quantitative easing," added Loynes.
  
In recent weeks, sterling had been hammered by growing expectations that the BoE could launch more quantitative easing (QE) -- effectively printing more money -- to secure economic recovery.
  
However, the July-September period marked the fourth quarter running of expansion since the recession, which ended in late 2009. Analysts' forecasts had been for weaker quarterly growth of 0.4 percent.
  
Nevertheless, the data marked a significant slowdown from the 1.2-percent surge which was recorded in the second quarter -- which had been the fastest quarterly growth rate for nine years.
  
The ONS added on Tuesday that the previous April-June period had been skewed by bad weather in the first three months of 2010, which had hampered the fragile recovery.
  
"Allowing for the recovery in the second quarter following the bad weather at the start of the year, the underlying growth in the third quarter is broadly similar to that in the second quarter," it said.
  
Last week, Britain's Conservative-Liberal Democrat coalition government had announced plans to cut almost half a million jobs, slashing budgets and welfare benefits as it sought to curb a huge deficit.
  
"The growth in the third quarter was surprisingly confident, exceeding all expectations and it will provide some welcome relief to the coalition government," said trader Mark Bolsom at currency group Travelex.
  
"These figures will refresh hopes that the UK will avoid the much maligned double dip -- but we are going to have to wait until 2011 to see what impact spending cuts and tax hikes will have on the pace of economic growth."

Date created : 2010-10-26

COMMENT(S)