5 Aug 2015
UK Q3 GDP to decelerate back to around 0.45% - NIESR Survey
FXStreet (Mumbai) - The UK's third-quarter economic growth is expected to decelerate back to around 0.45%, down from 0.7% measured in the previous three months, according to a fresh outlook for the UK economy published by the National Institute of Economic and Social Research (NIESR) on Wednesday.
Despite the expectations of weaker growth in the third quarter, NIESR sees the annual rate of growth at 2.5% during the same period, slightly below the 2.6% measured in the second quarter.
NIESR's forecast also expects CPI inflation close to zero this year, and below the official 2% target until the end of 2017. Although inflation is seen remaining weak, the Bank of England (BOE) is still expected to begin a tightening cycle early 2016.
Chris Williamson, chief economist at Markit, commented on the report, "A deterioration in service sector growth is the latest in a stream of signals that the economy has slowed as we move into the second half of the year. The fall in the services PMI follows signs of ongoing weakness in manufacturing and a renewed slowing in the construction sector."
Despite the expectations of weaker growth in the third quarter, NIESR sees the annual rate of growth at 2.5% during the same period, slightly below the 2.6% measured in the second quarter.
NIESR's forecast also expects CPI inflation close to zero this year, and below the official 2% target until the end of 2017. Although inflation is seen remaining weak, the Bank of England (BOE) is still expected to begin a tightening cycle early 2016.
Chris Williamson, chief economist at Markit, commented on the report, "A deterioration in service sector growth is the latest in a stream of signals that the economy has slowed as we move into the second half of the year. The fall in the services PMI follows signs of ongoing weakness in manufacturing and a renewed slowing in the construction sector."