Exports helped boost the UK’s economic growth in the third quarter (Q3), according to the latest report from the Office of National Statistics (ONS).
The research revealed the economy grew by 2.8% in 2010 compared to 2009, while Gross Domestic Product (GDP) increased by 0.8% between July and September this year. Trade provided its largest contribution to growth in two years, as exports rose faster than imports. According to the ONS data the weaker pound may be behind the surge in exports.
David Kern, chief economist at the British Chambers of Commerce, said: “The detailed GDP figures show positive features, with strong growth in manufacturing output, and in exports.
“The figures confirm our assessment that the UK economy is in a more robust state than many had thought. But we have not yet seen the impact of the tough deficit-cutting measures that the government will start implementing early in the New Year. Businesses and consumers will face growing pressures in the next few months, and it is important to avert risks of a setback.”
The GDP figures also revealed that consumer spending rose by 0.3%, down from 0.7% in Q2. However, government spending, which previously helped to drive economic recovery, increased by only 0.4%, down 1% in the previous quarter.
Kern added: “An increase in the quantitative easing programme must remain under active consideration if the economy shows renewed signs of weakness. On its part, the government must focus all its efforts on enabling the private sector to make 2011 a year for growth. Obstacles that hamper businesses in their efforts to create jobs, invest and export, must be removed.”
© Crimson Business Ltd. 2010