Britain'S Third Quarter Economic Expansion, The Hidden Danger Of Economic Recession

According to the financial times, Britain's third quarter economic expansion has removed the worries of the recession, but in the three months ended September, the economic recovery has not been as fast as expected, the slowest growth rate since 2010.

Data released by the National Bureau of Statistics (ONS) in November 11th (2019) showed that the economic output in the third quarter grew by 0.3% compared with the previous quarter, lower than the 0.4% expected by Reuters (Reuters). On average, the economy grew by 1% at the end of the third quarter only twelve months ago, the lowest growth rate since 2010. According to the National Bureau of statistics, Britain's economic growth slowed to its lowest level in nearly ten years, according to the past year.

The expansion in the third quarter was the result of a 0.2% contraction in the second quarter. The recession was defined as a negative growth in two consecutive quarters. The increase in output in the three months ended September was due to the active economic activity in July, while the output increased by 0.3% compared with that in June. However, eight and September were also shrinking. The service sector accounted for 80% of the total British economy, although its output increased by 0.4% in the third quarter, but its performance in eight or nine months was not satisfactory. The manufacturing sector was flat in the third quarter, and its output increased in July, and then contracted sharply in the two months thereafter.

James Smith, research director of the Resolution Foundation think-tank, said the data showed that the British economy was exempt from recession, but the contraction of the services sector in eight and September led to a marked slowdown in economic growth this year. The reasons for this slowdown are also affected by the global economic downturn, apart from the uncertainty in the UK. Household spending is still the biggest factor affecting the economic boom and the third quarter private consumption grew by 0.4% over the previous quarter, due to the strong labor market.

Yael Selfin, chief economist at KPMG, a consultancy, said that the low business investment showed that businesses continued to defer investment projects as the UK postponed the EU investment. According to the National Bureau of statistics, the total value of business investment fell by 1.2% compared with three years ago. Analysts said the third quarter's economic growth was lower than expected, also due to the weaker inventory activity in October than in March. Britain's economic situation this year is very unstable. Its performance in the second quarter is much lower than that in the euro area, while the third quarter performance is only slightly beyond the euro zone.