Despite the fact that Britain’s GDP growth has slowed, the country is still forecast to grow faster than the other G7 countries this year, which may lead to increased lending.
The International Monetary Fund expects that the UK’s GDP will increase to 3.2% across the whole year. This is 1% more than the US, which, with an expected growth of 2.2%, is in second place.
Despite this good news, economic growth has slowed from 0.9% in quarter two to 0.7% in the third. However, the fall was in line with most predictions. This takes the year-on-year growth rate to 3% so far, which is within market expectations.
The services industry has experienced the strongest growth, followed by production and manufacturing. A pick up in the rate of house building has helped the construction industry to begin to grow again, putting the sector in third place.
Rob Wood, who is the chief UK economist for Berenberg Bank, commented:
“We expect the recovery to soften a little further in the fourth quarter as the single currency area records little growth while a confluence of factors – principally the potential for rate hikes in the next 12 months and political uncertainty – drag a little on domestic growth.”
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