The British economy has avoided recession after officials figures showed it grew 0.3% in the third quarter of the year.
The GDP data for July to September from the Office for National Statistics showed the UK returned to growth after a dip of 0.2% between April and June. A technical recession is defined by two successive quarters of negative growth.
There were fears that Brexit uncertainty could have pushed the economy into further negative growth, but Britain’s services sector – which encompasses a range of industries from movie production to banking and IT – performed strongly enough to push the UK into positive territory.
Britain’s attraction as a centre for film production was one of the main drivers of growth, as it has been over the past two years, the ONS said. Spending on IT accelerated as firms upgraded their computer systems and improved online services to their customers.
Exports surged 5.2% quarter on quarter while imports only increased by 0.8% to leave net trade up 1.2%. But the ONS said it was concerned about the accuracy of the data after “external evidence” pointed to “weaker export growth than shown in the official estimates”.
There was also a downward trajectory across the quarter after increases in July and August turned negative in September when the economy contracted by 0.1%, pulling growth down to its lowest annualised rate, at 1%, in 10 years.
Business investment was the main drag on growth during the quarter after manufacturers cut back on upgrades to factories and purchases of new equipment.
Seamus Nevin, chief economist at Make UK, the manufacturers’ organisation, said firms continued to lay off workers in response to Brexit uncertainty and a slowing global economy.
“While the economy overall has seen a slight pick-up it has been led by the services industry with only the bounce-back in car manufacturing offering some positive impact following April shutdowns. Compounding this is the seventh consecutive month of job losses, with the rate of decline at its fastest for the past decade,” he said.
Liberal Democrat spokesman Ed Davey said the government was to blame for an “anaemic” economy.
“Today’s growth figures are anything but a cause for celebration,” he said.
