ONS figures reported a 3.0% higher GDP than in the same quarter in 2013.
Output in the dominant services sector rose by 0.7%, down from 1.1% growth in the second quarter, and also showed increases of 0.5% in production, 0.8% in construction and 0.3% in agriculture.
During the third quarter GDP was estimated to have been 3.4% higher than the pre-economic downturn peak in the first quarter of 2008.
Chancellor George Osborne said that growth in manufacturing and construction as well as services was encouraging, with the UK 'leading the pack in an increasingly uncertain global economy'.
Capital Economics senior UK economist Samuel Tombs says:
“While the 0.7% quarterly rise in GDP fell short of the second quarter’s 0.9% rate, it matched the average increase seen since the start of 2013.
“And growth has become broader-based – while quarterly growth in services sector output eased from 1.1% to 0.7%, growth in both industrial production and construction output picked up from 0.2% to 0.5% and from 0.7% to 0.8% respectively.”
Helal Miah, investment research analyst at The Share Centre, explains:
“UK GDP for Q3 came in at 0.7%, in line with expectations and why the initial reaction from the markets has been muted. These numbers confirm that there has been a mild slowdown from the previous quarter of 0.9%. The market will point towards a number of global events as a cause for a moderation of the growth rate, especially the worsening conditions in Europe and the spill over effects to the rest of the world.
“However, the figures still confirm that the UK is the most robust of the major developed economies. We believe that the recovery has more to go, albeit at slower rates than previously expected, and that UK stocks remain the best source for good returns for investors. Specifically, we believe the more UK focussed small and mid-cap stocks should outperform the internationally exposed large caps."
TUC General Secretary Frances O’Grady said:
“It’s a tale of two economies – a few people at the top are thriving, but most workers’ wages are still in decline.
“This kind of growth is fragile because businesses can’t keep prospering if their customers have less money to spend.
“George Osborne needs a clear strategy for a wages-led recovery or it will be the deficit that continues to grow while the economy runs out of steam.”
Ed Balls MP, Labour’s Shadow Chancellor, said:
“For all George Osborne’s claims that the economy is fixed most people are still not feeling the recovery. Working people are over £1600 a year worse off since 2010 and these figures now show a concerning slowdown in economic growth too.
“We need a strong and balanced recovery that works for all working people, not just a few at the top. But under the Tories we have stagnating wages and too many people in low-paid jobs which, as the OBR said last week, are leading to rising borrowing. This plan isn’t working for working people.
“And under this government house building is it at its lowest level since the 1920s, business investment is lagging behind our competitors and exports are way off target.
“Labour’s economic plan will make Britain better off, create more good jobs and earn our way to higher living standards for all.
“We will get 200,000 new homes built a year, raise the minimum wage, cut business rates and expand free childcare for working parents. And we will balance the books as soon as possible in the next Parliament, but do so in a fairer way by reversing David Cameron’s tax cut for millionaires.”
