UK's economic growth slows

Britain's rate of economic growth slowed in the third quarter of this year, according to the Office of National Statistics (ONS).

13:00 21 October 2005

Britain's rate of economic growth slowed in the third quarter of this year, according to the Office of National Statistics (ONS).

The agency reported that gross domestic product (GDP) had increased by 0.4 per cent during the period, compared to 0.5 per cent growth in the second quarter.

Total output from the production industries dropped by 0.6 per cent, although manufacturing grew by 0.4.

The service industries saw growth of 0.6 per cent, with the business and finance sectors experiencing increased output of 0.7 per cent. Government and other public service output rose by the same figure.

In contrast, the mining and quarrying industry saw a rapid decrease of 6.8 per cent, while the gas and water supply industry shrunk by 1.8 per cent. Overall, GDP had grown by only 0.3 per cent on the year before.

The news came after figures from ONS suggested that inflation had risen to 2.5 per cent in September, on the back of high petrol prices.

Commenting on the results, Angus McCrone, senior economist at the Centre for Economics and Business Research (CEBR), blamed the "very sharp contraction in North Sea oil and gas production in the July-to-September period" for the decrease in GDP growth.

"Output in the sector that includes oil and gas, and also mining and quarrying, fell no less than 6.8 per cent on the quarter, to stand 9.9 per cent down on the year," he said.

"This was enough to pull overall UK economic growth down by some 0.15 percentage points in the third quarter - so what would otherwise have been a respectable figure of 0.5 per cent or 0.6 per cent for the economy as a whole becomes a sub-standard one of 0.4 per cent."